An international investment bank circulated to its clients in the region a very serious report warning from an eminent crash in the real estate sector similar to the one witnessed in the stock market in Qatar and elsewhere in the GCC. The same is due to various reasons, among them:
- just like the stock market, the last increase in the rent prices was based on purely speculative reasons, no fundamental reasons involved, therefore such increase would not be sustainable on the medium term;
- in early 2007 will become available on the market a large number of housing units, the construction of which were initiated 2 years ago to benefit from the booming real estate sector. The number is estimated at around 15,000 units;
- the end of the Asian Games will directly engender the vacancy of around 2000 units. Such units were occupied by foreign companies’ staff hired for a determined period for the purpose of the games;
- after the games, the Olympic Village will host all Hamad hospital staff and furthermore, various other public or semi public entities would be able to benefit of such facilities. The total capacity of the Olympic village is about 1000 units which means that other units currently occupied by Hamad Hospital Staff would be vacated;
- the moratorium on new oil and gas projects for the next 3 years means that oil and gas companies would not be substantially hiring further middle management and senior staff. Furthermore, various oil and gas companies are building there own compounds in areas like Al Khor and Rass Laffan;
- the new changes to the laws allowing foreigners to own freehold and leasehold in various areas in Qatar will, in the medium term, make renting accommodation at the current rate less interesting for long term expats if compared to mortgages.
The market is expected to witness a decrease of around 20 to 25% within the first six to twelve months of the year 2007.
Hi all,
An international investment bank circulated to its clients in the region a very serious report warning from an eminent crash in the real estate sector similar to the one witnessed in the stock market in Qatar and elsewhere in the GCC. The same is due to various reasons, among them:
- just like the stock market, the last increase in the rent prices was based on purely speculative reasons, no fundamental reasons involved, therefore such increase would not be sustainable on the medium term;
- in early 2007 will become available on the market a large number of housing units, the construction of which were initiated 2 years ago to benefit from the booming real estate sector. The number is estimated at around 15,000 units;
- the end of the Asian Games will directly engender the vacancy of around 2000 units. Such units were occupied by foreign companies’ staff hired for a determined period for the purpose of the games;
- after the games, the Olympic Village will host all Hamad hospital staff and furthermore, various other public or semi public entities would be able to benefit of such facilities. The total capacity of the Olympic village is about 1000 units which means that other units currently occupied by Hamad Hospital Staff would be vacated;
- the moratorium on new oil and gas projects for the next 3 years means that oil and gas companies would not be substantially hiring further middle management and senior staff. Furthermore, various oil and gas companies are building there own compounds in areas like Al Khor and Rass Laffan;
- the new changes to the laws allowing foreigners to own freehold and leasehold in various areas in Qatar will, in the medium term, make renting accommodation at the current rate less interesting for long term expats if compared to mortgages.
The market is expected to witness a decrease of around 20 to 25% within the first six to twelve months of the year 2007.