Qatar has become buyers’ market for home purchase

Qatar, which has become a buyers’ market for home purchase, could however see rents remain “stable” this year, a situation that is seen ideal for tenants to consider ownership, according to ValuStrat.

Qatar has most likely to have transformed into a buyers’ market due to steady increase in supply, it said, highlighting that new construction contracts worth QR46.1bn are expected this year.

“This is reflected by the increasing gap between listed and transaction prices of residential properties in the favour of buyers,” it said in a report.

Doha has the highest number of total sales transactions and prices for residential properties compared to other municipalities, as per the Ministry of Justice data. Currently, three out of four freehold zone properties, Pearl-Qatar, Lusail and West Bay Lagoon are in Doha. It also has a majority of leasehold properties where foreigners can lease property for 99 years.

“In the past year, there has been declining demand for high-end residential units due to a fall in white-collar workers, thus reducing rents,” it said, finding that the average rents per sq m have fallen 8%-10% year-on-year in Al Saad, Bin Mahmoud, Abu Hamour, Ain Khalid and The Pearl.

Property yields would be more attractive so long as the prices fall faster than rents, it said, adding in Qatar, the rate of return is an important factor as about 60% of the residential properties are rented, reflective of large expatriate population.

“It is expected that these rents will remain stable throughout 2017; especially for mid-income housing. This can be attributed to the predicted gradual rise in demand, as a result of changing demographics, the rise of middle and low-income segments, and stabilisation of oil prices,” it said.

In the longer term, falling prices and stable rents make a good case for tenants to consider home ownership and for some investors to seek out properties with attractive yields, it added.

In 2016, 50% of the sales in Doha were in residential properties, mainly villas and bungalows, followed by land plots. Against 2015, prices per sq m of residential units shrank 10%, except in Madinat Khalifa South, where prices remained stable.

Al Thumama had the highest residential land plots deals, while in Al Saad, there was higher sale of residential buildings, although, price per sq m fell 10%. In Old Al Ghanim, there has been a fall in price per sq m for residential buildings since 2015; although the price per sq m for mixed used buildings increased 5%.

In 2016, the most popular area was Al Rayyan, with the most sales transactions in Muaither and New Al Rayyan, Al Gharafa, Muraikh and Ain Khalid.

The villas and bungalows transactions remained static in Al Gharafa, albeit, average price per sq m rose 5%. In Al Waab, although the residential units sold remained flat in 2016, price per sq m declined 10%.

Currently, foreigner can buy a luxury two-bedroom house on the first floor in Viva Bahriya, The Pearl, over a 150sq m for QR2.3mn; a three-bedroom on the fifth floor in Aspire tower in West Bay Lagoon over a 275sq m for QR3.5mn; and a four-bedroom townhouse in Porto Arabia, The Pearl, over a 474sq m for QR9mn.