The correction in prices of real estate properties have created a good opportunity for foreign investors and expatriates living in Qatar to own a home in the country, host of the 2022 Fifa games.
With an addition of 1,265 new villas and apartments during the fourth quarter of last year (Q4 2018), total housing stock in Qatar by the end of 2018 reached at 290,000 units. The additional supply of residential units continued to put downward pressure on prices of residential properties as well as rents, the findings of a latest study show.
The Valustrat Price Index (VPI)-Residential for Q4 2018, showed an overall 9.3 percent annual and 1 percent quarterly decline in capital values. Villa and freehold apartment prices saw marginal declines, quarter-on-quarter (QoQ), of 1.1 percent and 1.2 percent, respectively.
The correction in prices of real estate properties have created a good opportunity for foreign investors and expatriates living in Qatar to own a home in the country, host of the 2022 Fifa games. Amongst freehold apartments, Lusail witnessed the highest overall decline in values followed by West Bay Lagoon and The Pearl. Villas coped well this quarter as only a few locations experienced price declines.
According to the report, quarterly capital depreciation of between 2 percent to 5 percent was observed in clusters of West Bay Lagoon, Al Waab, Fereej Soudan, Umm Salal Mohammad and Al Kharaitiyat. Gross yields for residential units averaged an overall 4.9 percent, adjusted by 5.9 percent for apartments and 4.4 percent for villas.
Apartment supply consisted of 810 units coming from project handovers in Lusail, The Pearl and Umm Salal area, and the completion of villa compounds in Umm Salal, Duhail, New Salata, Al Gharafa and Al Messila added 450 new properties to existing stock. The projected completions for 2019 have been adjusted upwards to 13,700 units due to delayed deliveries from 2018.
The median transacted prices for houses decreased by 3.6 percent QoQ and 10.0 percent year-on-year (YoY). Transactional volumes for houses declined by 3.2 percent QoQ and increased 1 percent YoY.
The median transacted price for residential units was QR2.7m with the five largest ticket sizes seen in The Pearl, New Al Salata, Nuaija, Al Sakhama and Umm Salal Ali for developed plots ranging from 1,500 square metres (sqm) to 7,000sqm. Majority of transactions took place in Al Rayyan (27 percent) followed by Doha (22 percent) and Al Daayen (18 percent) • 60 transactions were recorded for residential buildings with a median ticket size of QR6.75m.
As of October 2018, transactional volume in The Pearl and West Bay Lagoon was 526 units with a total value of QR1.15bn.
Average asking rents declined by 10.8 percent YoY and 2.2 percent QoQ. The monthly asking rents for apartments fell 2.3 percent quarterly and 10.6 percent annually. The highest quarterly fall in rentals was seen in Al Sadd, West Bay, Al Mansoura and Fereej Bin Mahmoud
As a result of increased availability in certain areas such as Doha Al Jadeed, Lusail, Al Wakrah, Musheireb and Old Aiport, tenants were offered incentives in the form of rent-free periods of up to 3 months (at minimum 1-year contract) and waiving utility expenses.
The average monthly asking rents for villas fell by 2 percent QoQ and 12 percent YoY. The high-end locations such as West Bay Lagoon and Al Waab experienced highest quarterly falls up to 5 percent. Downward adjustment in rents in prime locations continue to put pressure on rentals in secondary locations, resulting in a 20 percent annual decline, noted the report.
