Jan 02 2013
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Real estate bounces back after long lull
DOHA: The real estate sector is witnessing a boom after a prolonged lull, with transactions almost doubling in 2012, and the prices of land near existing and planned development projects across the country galloping to incredible highs.
The value of real estate deals struck last year totalled a staggering QR42bn ($11.5bn), up 59.1 percent over 2011. The transactions averaged a record QR3.5bn a month or, QR175m a day.
The onset of the boom bodes well for the country which is hosting the coveted 2022 FIFA World Cup, but experts warn it could lead to an escalation in house rents that already are showing signs of an upswing.
According to real estate registration data provided by the Ministry of Justice, the first quarter of 2012 saw transactions worth QR13.3bn, compared to QR5.3bn during the corresponding period of 2011.
The total in the third quarter stood at QR7.79bn compared to QR5.07bn in Q3 of 2011. The fourth and the last quarter of 2012 saw transactions worth QR10bn as compared to QR7.6bn in Q4 of 2011.
Market analysts expect the real estate sector to grow more aggressively in 2013 with a likely influx of an additional over 600,000 foreign workers to engage in the booming building activity in the country.
"Land prices already have increased by 50 percent in 2012, and with a slew of development projects lined up for launch this year, more and more foreign companies are likely to enter the Qatari market," an analyst who didn't want his name in print said.
With nearly 600,000 more workers expected to arrive this year, the demand for housing is likely to go up considerably as the population would explode way beyond two million.
Currently, housing supplies exceed demand but the situation might reverse by the year-end, said the analyst. This means that house rents would begin spiraling again.
Market reports suggest there has been a steady increase in the prices of land, particularly in Doha and its sprawling suburbs.
For instance, in Al Thumama, which is close to the Doha International Airport, the first signs of infrastructure development led to a 72.2 percent jump in land prices to QR310 per square foot.
It is likely that the announcement of rail and metro station locations, as well as other government projects, will have an even greater impact on land prices, said the analyst.
© The Peninsula 2013
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