High rental income pushes up demand for real estate

Demand for real estate across the country is on an upswing since an increasing number of investors and developers are attracted to the sector inspired by high rental income.

According to real estate company, Roots, rental income from real estate has been giving more returns than bank deposits.

And this partly explains why real estate transactions in the first half of this year (January to June) soared to a record QR24.41bn ($6.7bn).

This was disclosed by the Managing Director of Roots, Ahmed Al Oroqui, in remarks published by local Arabic daily Al Raya yesterday.

The growth in the value of transactions in H1 was a high of 18.44 percent over the same period of last year, Al Oroqui said.

According to him, the value of real estate transactions was more (QR24.78bn) in the first half of 2012 — in fact, having dropped to QR20.61bn in H1 of 2013.

Talking of H1 of this year, Al Oroqui said 4,503 deals took place in the six months compared to 3,918 in the first half of 2013.

Referring to rising demand for real estate during the first six months of 2014, he said it was basically triggered by heavy influx of foreign workers for various development projects.

Additionally, government spending on mega infrastructure development projects and on public amenities has been going up substantially.

Banks and financial institutions have been lending to people liberally to invest in real estate and this is also one of the factors responsible for the increasing demand, said Al Oroqui.

Investors and developers are buying more property to launch housing and other projects and bringing over more and more foreign workers.

Areas in the north (Al Shamal) are witnessing hectic development. However, as for Doha, owners are waiting and watching and are not selling prime real estate except when offered the price of their asking, Al Oroqui said.

Many real estate owners in Doha are waiting for the government to make public urban plan for the city that would specify commercial and residential areas.

Some are waiting for the government to specify the height of buildings in the capital city.

The Peninsula | Photo by Dennis Salas