By Satish Kanady
DOHA: Qatar’s property market is fast narrowing in its demand-supply gap. The ‘overhanging’ of Qatar’s real estate market is an old story; and looking from a medium term to long-term perspective, the demand side is set to erode the country’s previously oversupply record, a top property consultant has said.
Hit by huge demand-supply gap, Qatar’s property market has been considerably overhanging since 2009. But 2012 saw a 20 percent increase in terms of transaction volume and a high 35 percent in value terms, Jed Wolfe (pictured), Managing Director, Asteco Qatar told The Peninsula.
The demand side of residential market is fast picking up in Qatar. In projects like The Pearl Qatar, there are very few vacant units available. The one-bed room apartment segment is fully booked.
Residential market is fast picking up in Qatar. A breakdown in terms of leasing configurations of 2012 residential renting shows a 30 percent growth in one-bedroom apartment and 40 percent increase in two-bedroom apartments. The three-bedroom apartment segment has recorded a 15 percent increase over the last one year, said Jed.
One-bedroom apartments in prime locations proved most popular within the residential leasing market, while prime luxury villas of high quality performed the best during 2012. Demand for good quality, prime villas have marginally outstripped supply and this trend is likely to continue.
The performance of the property market is set to boost in 2013 with the major contracts for key projects for rail net work and associated construction projects are awarded.
The demand is fast outstripping the supply in the commercial sector too, especially in the prime Diplomatic/West Bay areas. The rate of vacant space in prime locations has reduced considerably. The demand-supply gap will further narrow down by the end of 2013, he said.
In the commercial leasing market, the vast proportion of tenant inquiries were from international companies seeking 200 to 600sqm of space. The 2012 Q4 witnessed the final lettings in Tornado Tower and Al Fardan Commercial Tower, two of the most prestigious office towers in West Bay.
With the government issuing orders that future constructions in the Diplomatic areas should not have more than 20 floors, the demand has almost outstripped the supply in this area. Plots are no more being developed in this area.
The fact that the Doha outskirts are emerging as prime locations is another indications of a maturing Qatari property market. The West Bay Area and Doha Downtown are considered a s prime locations and the rents are very high. Not all business can afford these. So land developers are offering new locations.
According to Jed, the growing land value is unlikely to have its bearing on the rentals. “The the Gulf market is different. In terms of commercial space, tenants have a major stake in fixing rents. The residential rentals are often influenced by the income levels of expatriates”.