DOHA: In general, positive performance of Qatar's real estate market in the previous months was extended over the month of February as not much activity took place in it while real estate indicators saw minimal changes, according to the Qatar Real Estate Overview for February by Century 21 Qatar.
Apartment rental market saw a positive growth in February with most of areas under study witnessed increases in apartment rents, said the report, noting that such increases indicate a pickup in demand for apartments; however, it might also point out the efforts by real estate companies to push rents up in light of better market conditions.
Nevertheless, given the large volumes of unit supply currently on offer in the market, it is feared that these efforts to push up rents might bear negative impacts in the near future where saturated condition of the market would force hefty declines later, the report said.
Decline in number of units being delivered to the market the last few months has also helped market indicators to reach some sort of stabilisation. Apartment rents have seen a growth of three percent to six percent in six areas with Al Mansoura area being atop others at six percent. Al Dafna has seen decline of two percent only. In terms of average apartment rents (un-furnished) by area, order of areas has remained almost unchanged where Al Dafna, Al Sadd and Bin Mahmoud stand ahead of other areas while Muaither and Madinat Khalifa come at the end. It is noted that a number of landlords (or real estate companies) offered attractive grace period (six months in one case) to secure long tenancy contracts at fixed rates.
Villa rents
Villa rentals have seen a mixed growth over the month of February, with almost half of areas under study witnessing villa rent declines between four percent and six percent approximately while other areas seeing slight growth.
Khretiyat and Markiya have seen highest growth in villa rents in February at 7 percent and 6 percent, respectively, while areas such as Al Matar, Al Hilal, Aziziya, Al Waab and Duhail have seen approximately six percent decline in villa rents.
February has seen a pickup in demand for 'budget' villas where tenants are increasingly seeking to move from apartments to budget villas. All areas that have seen growth in villa rents in February are predominantly budget villa areas except for Al Dafna.
Al Dafna remains the top area on the list of villa rents in Doha at an average of approximately QR22,000 per month in February, followed by Duhail and Al Hilal at QR13,250 and QR12,200. Al Khretiyat and Al Garrafa came last at QR10,400 and QR10,450 per month.
In an immature market, where proper definition of valuation methods and lack of professional valuers, current property rents in Doha don't fully reflect property characteristics for each area. Thus, confusion might rise when knowing that a compound villa in a central location of the city rents for the same amount (or only a little less) that a similar villa in a relatively far area is rented for.
As for real estate transactions in February, according to Real Estate Department at Ministry of Justice, records saw more than QR272m during the fourth week of February 2011. Over the month of February (4 weeks between January 30 and February 24), the value of real estate transactions was approximately QR1.62bn, most of which in land plots.
Approximately, 64 percent of total transactions were in land plots, while sales of residential villas and houses accounted for 25 percent of total number of transactions. Land plots in central areas of Doha, such as Al Sadd and Al Nasr, continued to see a number of high-priced land transactions indicating future real estate projects in these areas.
Doha transactions in February accounted for approximately 57 percent of total money value of transactions while Al Rayyan and Al Wakra came second and third at 23 percent and 8 percent, respectively. Doha has seen 162 real estate transactions with approximately QR918m between Jan 30 and Feb 24 2011.
With regard to commercial office rental market in February, a continuous situation of low activity in office sector is defining the current problem of office market in Doha.
The increasing demand for office space in the city is considered marginal compared to large size of office space offered in the market. Grade B office space (low rise on major streets in the city, e.g. C & D Ring Roads and Matar Road), are currently witnessing highest activity with demand for such type is showing resilient progress.
Average monthly leasing rates for office space in Doha currently range between QR90 and QR120 per sqm per month for low rise offices while office space in towers is usually rented for above QR150 per sqm per month.
© The Peninsula 2011
