Doha real estate market steady in first quarter

Overall property sales activity in Doha for Q1 2013 is holding its own, with a 2% increase in the total value of transactions recorded in the first three months of the year, despite a corresponding 2% dip in sales volume across all sectors against Q4 2012 figures, according to the latest Asteco Q1 2013 Qatar report. 

Villa sales performed marginally better, with Qatar Ministry of Justice data revealing a 6% increase in total transaction value and an 8% growth in the number of villa transactions, compared with Q4 2012, while the total value of transactions for apartment blocks fell by 56% in Q1 versus the final quarter of last year. 

Primary market prices, per square metre, in Porto Arabia-Pearl, Lagoon Plaza were QAR 13,500, and QAR 12,500 respectively, mirroring Q4 2012 prices. 

Off-plan sales are also undergoing a small revival, with the report noting that some developers are selling units on a payment plan in towers under construction. 

“While the market is showing no real movement in terms of sales activity, we are seeing a noticeable increase in the number of feasibility studies and valuations being conducted for development and finance, which is a clear indicator of increased market confidence as developers look to restart or commence construction in the coming months,” said Jed Wolfe, Managing Director, Asteco Qatar. 

This is supported by the news that a number of key infrastructure projects are moving into the early phases of tangible development, following the commencement of enabling work on the Doha Metro, awarding of the QAR 2.3 billion contract for the Doha Expressway, and the QAR 2.5 billion contract for the Lusail Expressway. 

The villa rental market continues to outperform the apartment market in premium locations, with small rental increases recorded due to shortage of villas in prime waterfront locations. Rents for five-bedroom villas in West Bay Lagoon stood at QAR 27,500 per month, while rents for similar properties in Al Dafna were averaged at QAR 20,750 per month, and QAR 13,250 in Al Hilal, Ain Khaled and Al Gharrafa.  

There has also been little change in the office market over the last quarter, with rents remaining static in Q1 2013 as issues of oversupply affect rates, forcing building owners to become more flexible in their leasing terms, with a move towards split-building leasing and floor or part-floor letting. Demand for smaller fitted units of 500-square metres or less in the CBD is also rising as a cost-effective commercial solution.