DOHA: Falling world oil prices and reports of shelving and rescheduling of some projects by the government may help stabilise rising house rents in the country, say market insiders.
“The market is already witnessing a huge supply-demand gap. There are reports of several projects being shelved. This might lead to a lower-than-expected growth in Qatar’s projected population,” a market commentator said.
Details related to either shelving or rescheduling of mega projects with a combined value of at least $28bn are already in public domain.
A huge contingent of fresh labour force was expected to get involved in these projects.
Temporary suspension or shelving of these projects means that there would be lesser inflow of foreign workers being recruited, at least in the short-term, said another market analyst.
Financial and investment expert Abdullah Al Khater said that in fact Qatar was working on the idea of ‘prioritising’ its projects well before the market was hit by oil price crash.
Simultaneous execution of multi-billion dollar projects has been putting tremendous pressure on the construction sector, he said. “The decision to focus on FIFA-related projects will certainly have a bearing on the rental market,” said Al Khater.
An indication of the softening up of the real estate market was provided by the Qatar Central Bank’s real estate price index, which went down slightly last December after showing an upswing until a better part of 2014. In just a month, from November to December 2014, the index was down three percent—from 263.5 points to 255.6 points, QCB data show.
The figures also suggest a drop in the index on quarter-on-quarter basis. The index jumped 10 percent in the third quarter (Q3: July to September, 2014), while in the fourth and the last quarter, the rise was merely 0.71 percent.
However, overall, the real estate price index jumped 34.6 percent for the full year (2014) as compared to 2013, hitting 255.6 points in December, as against 189.8 points a year earlier.
The index had peaked at a record high of 263.5 points in November of 2014. According to the Ministry of Justice data, the total transaction value of real estate in the month of November was QR3.6bn, almost a billion dollars.
However, an official from a reputed real estate agency, LS, focusing on The Pearl-Qatar and West Bay residential accommodation, said he preferred to differ on the issue of the rental market in Qatar expected to stabilise.
Its sales and leasing manager, Dan Strutt, said: “We have not seen any signs of the rental market slowing down. Prices may start to stabilise over the coming months, mainly because of the promise of increased supply”.
Strutt said prices have continued to rise in The Pearl-Qatar, especially for most studio, one and two-bedroom units.
The Peninsula
