DOHA: A series of recent events such as the Mazaya IPO, Barwa Real Estate merger with Alaqaria and plans for the $2.5bn merger between Group of International Housing Co and Ezdan indicated that the strength and determination of Qatari companies amid the current global financial crisis and that the local confidence is rising in the real estate sector.
The first quarterly report released this month from Century 21 Qatar highlights diverse signs of growth in singular types of real estate classes.
A number of mega scale infrastructure projects such as the metro and rail system, the $1bn tunnel connecting the New Doha Airport with West Bay are expected to trigger expansion of the construction sector in the near future.
On the real estate market, a demand for different real estate asset classes has increased in the months of January and February indicating that the market is continuing to stabilise.
The supply volumes continue to soar with an increasing number of construction projects that are either completed or about to be completed, making the current oversupply not to reach a breakeven point in the near future.
The large supply versus demand has forced real estate companies into aggressive competition which contributes to a positive and healthy market. A number of high profile construction projects commenced in the first quarter, boosting real estate investors. Some of these projects include the $110m Al Waab Mall.
What is more, as indicated in the Century 21 Q1 report, the market viewpoint for the second quarter based on the current figures, rental rates are far likely to decline and occupation of flats are predicted to fall by 10 percent by July, putting pressure on villa rentals but the outcome is expected to be slight.
Re-evaluating the current tenancy contracts is quite frequent in the market. The Department of Valuation and Advisory of Century 21 Qatar indicated that this trend is combined along with requests to revise the residential contracts for corporate residences.
During the second half of the year, announcements of several new mega scale developments are expected since developers are considering redesigning plans for their projects according to new market variables. Banks are gradually opening doors for personal finance which Century 21 Qatar believes will eventually lead to covering the real estate finance since there is seen timidity in mortgages and financing.
By Erika Widen
© The Peninsula 2010
