Qatar real estate market to grow in 2010

QATAR: Qatar’s real estate sector is estimated to grow by around 7% in 2010, the Oxford Business Group (OBG) said.

The country's real estate sector is expected to generate even better returns in 2H 2010 as confidence continues to climb amid ample capital in hand, OBG said. Qatar’s gross domestic product is projected to grow at a rate of 16%  this year, one of the highest in the world.

OBG added that while it might still take some time before there will be a balance in supply and demand in the real estate market, the balance might be achieved sooner rather than later as banks further ease their lending restrictions, and private spending increases.

Dun & Bradstreet’s “Business Optimism Index” survey released in mid-April 2010 indicated that over one-third of  respondents expected borrowing conditions to improve in 2010 with 32% saying they were considering expanding  overseas. Overall, across-the-board improvement in confidence was noted in the survey, ranging from prices to sales volumes.

A report released by property firm Century 21 indicated an uptick in real estate demand across most asset classes, though the increase in supply of residential properties saw rental costs dipping for apartments.  

Century 21 expects the trend to continue till the middle of 2010.

Michel Gebrael, project manager of Project Qatar 2010, a construction industry event with a focus on green and  sustainable projects, held from April 12 to 15 here, had told reporters that Qatar's construction and property sectors had been performing exceptionally well within the downturn, thanks to a stable economy and good tourism and housing base.

“This year promises even more productivity as the industry sets its sights on post-crisis business. Qatar’s real estate is set to rebound from any fall in activity it experienced over the past two years,” Gebrael said.

According to OBG, Qatar’s real estate and construction industries have benefited from the government’s measured  interventions in the marketplace, including buying large stakes in banks’ property portfolios and rolling out a stepped-up programme of infrastructure developments involving investments in transport, tourism, industry and social infrastructure projects.

In February, the government lifted a ban on price rises in the residential rental rates. Investors may be drawn  back into the residential market by the prospect of better returns.

However, the government’s rental freeze for retail and other commercial properties is expected to remain until  February 2011. More businesses will take advantage of capped rent cost to either commence operations or expand existing operations, reported OBG.