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Tribune News Network
Doha
The fourth quarter 2017 review issued by leading regional consulting firm ValuStrat reports heightened supply activity in all sectors of the Qatari real estate market.
Housing prices showed signs of stabilising with a quarterly increase in transaction volume.
The retail sector experienced less pressure, as average rents for mall space remained stable and shopping centres enjoyed a healthy footfall. Qatar's tourism and hospitality segments continued to operate in a challenging market.
MRICS ValuStrat Qatar General Manager Pawel Banach said,"... Amid regional challenges, 2017 ended on a high note with the value of real estate transactions reaching QR32.7 billion, 20 percent higher than 2016.
"Signs of stability were experienced in transacted prices of residential properties. All the sub-sectors of real estate market experienced notable increases in supply activity with retail sector expanding by 60 percent since 2016. However, it added, the influx of supply continued to put downward pressure on rents in residential and commercial sectors.
"In the short term, due to projected expansion in supply, both sectors may continue to incur market corrections. In the medium term, depending on anticipated oil price recovery and government support the downward trajectory may stabilise..."
A total of 6,625 housing units were delivered in 2017, bringing the total residential supply to 286,125 properties. Because of the surge in supply and stagnating population growth rate occupancy remained within 75-80 percent in 2017.
Around 56 percent of 2018's pipeline is expected to be delivered in prime locations such as The Pearl, West Bay and Lusail.
"... This quarter the trends of falling median transacted prices and rising transactional volumes were reversed. Median transacted prices remained stable over the last year and increased by 7 percent since the previous quarter. This increase in transacted prices can be attributed to larger ticket sizes of housing transactions experienced in northern and southern outskirts of central Doha. On the other hand, increased borrowing costs eroded transactional volume by 19 percent YoY...," said Anum Hasan, Market Research Analyst at ValuStrat Qatar.
Citywide residential asking rents declined 15 percent over the past 12 months and 5 percent since the third quarter.
An estimated 750,000 sq m gross leasable area (GLA) of office space was projected for 2017, of which 52 percent was completed during the course of the year. Projections for 2018 have been upward adjusted to 940,000 sq m GLA due to delayed deliveries from 2016/17.
In the hospitality sector, four hotel establishments (Time Rako, Al Thuraya Tower, Victoria Hotel and Golden Tulip Doha) were added during the quarter.
