DOHA: With Qatar’s real estate market witnessing a steady increase in the land value, rentals have gone up something between 20 percent and 30 percent this year, compared to the previous year.
The pressure on land prices had its bearing on the rentals mainly during the second half of this year.
The spurt in the rentals is mainly because of the sharp increase in value of lands. The hike in the land values were initially recorded in Central Doha, which subsequently stretched out to in and around Doha City, Al Arab reported quoting market players as saying.
Ali Isahaq, a leading appraiser, attributed the brisk land deals to the easy availability of loans in the country. The rise in the land prices and the rentals show that Qatar’s real estate sector has really picked up, after a brief lull, he noted.
The growing demand for lands and the rise in the rentals are strong indicators of growing optimism of investors.
According to Ali Isahaq, the land value has gone up by 50 percent in some parts of Doha compared to last year. The rentals have also grown up by 20 percent to 30 percent this year compared to the previous year, he said.
“Indications are that Qatar’s real estate sector is heading to the pre-2008 levels when the rentals reached a new high,” noted Ahmed Al Aroqui. The market receives an increasing number of enquiries. A large number of vacant buildings /space have been leased out during the last few months, attracting more developers and investors to the market, he said.
Ahmed Jassim Al Jolo, Chairman of Qatar Society of Engineers blamed the speculators for the sudden rise in the land price. Speculators are manipulating the market. The profit margin of the developers is expected to drop by 10 percent to 12 percent this year due to the spurt in the land value, he said.
“The market is currently witnessing a sharp rise in both land price and rentals. Going by the current trend, it would be difficult to forecast the trend in 2014. It would be hard to predict how the market is going to play out next year,” Al Jolo said.
Ezdan’s weekly report noted transactions of plots accounted for 63.1 percent of Qatar’s total real estate transactions, with a value of QR548.2m, during the first week of December 2013.
Of the real estate transactions in Doha Municipality, 53.6 percent was plot-related deals. In Al Wakra, plot deals accounted for 87 percent of the total transactions with a total value of QR122.5m, while the combined value of ‘other real estate’ transactions was just QR18.4m.