The proactive government policies will encourage Qatar’s real estate market, said consulting firm ValuStrat in its third quarter 2019 review report, yesterday. The rents in residential and office sectors became even more competitive during the third quarter of this year.
“With falling mortgage rates and capital values, buying property for non-Qatari households is becoming easier than before. Sales transaction volumes accumulated to QR13.8bn in value during the first eight months of 2019, however, volumes were down by 14 percent against the same period last year,” Pawel Banach, General Manager, ValuStrat Qatar told The Peninsula.
“Despite the current market downturn, the outlook for the medium and long term is encouraged by pro-active government responses in the form of new initiatives. For example, this quarter saw a new law introduced which grants a 5-year automatically renewable residency visa to owners and beneficiaries of real estate – such policies have a clear focus on promoting real estate as a tool for economic progress and future sustainability,” he added.
During third quarter of 2019, residential asking rents declined 7.2 percent over the past 12 months and 1.6 percent since the first quarter. An influx of supply has led to a reduction in median monthly asking rents of up to 8 percent annually in The Pearl, Lusail and West Bay. Highest annual fall in rents of up to 10 percent was experienced in Abu Hamour, Ain Khaled, West Bay Lagoon and Al Duhail.
“Due to lower rents and increasing incentives being offered by landlords vacancy rates in prime locations have reduced as tenants are trading up in a flight to quality for better locations and amenities.
It is projected that the upcoming supply will continue to put pressure on rental prices in the short term,” said Anum Hasan, Senior Market Research Analyst for ValuStrat.
“Recent rental declines will be considered healthy from the perspective of tenants, given that past rates were considered expensive by many. These declines will make housing generally more affordable and competitive in Qatar,” said Hasan.
Qatar’s ValuStrat Price Index (VPI) a valuation-based index for residential capital values, stood at 71.8 points as of Q3 2019. Countrywide residential capital values declined by 15.5 percent compared to the same quarter two years ago, down 5.3 percent year-on year (YoY) and 1.4 percent quarter-on-quarter (QoQ).
The average capital value of a residential unit stood at QR8,000 per sq m. Total residential stock reached 295,950 units as of Q3 2019 with the delivery of 1,250 apartments and villas in The Pearl (Viva Bahriya), Lusail (Fox Hills & Waterfront district), Musheireb, Al Khor, Abu Hamour, New Salata and Muraikh. Estimated project completions for 2020 have been adjusted to 13,500 units; 65% of which is expected in The Pearl and Lusail.
