Despite increased supply coming into Qatar’s property market in 2012, the overall industry, especially the residential sector, will see a year of stabilisation in 2012, according to property consultancy CBRE.
Roughly 15,000 new residential units are expected to be added to Qatar’s market this year, and the office sector is set to rise by 800,000 square metres of new space, said Matthew Green, head of Research & Consultancy for CBRE Middle East.
“I think oversupply in the residential market is probably less of a concern,” said Green. “There is significant supply coming through over the next few years but that’s going to be in tandem with population growth and the expansion of companies to help drive forward the infrastructure works for FIFA World Cup,” he said.
The total stock of luxury apartments reached 9,750 at the end of 2011, according to a recent report by property consultants DTZ, and the firm forecasts the stock to reach 16,250 units by the end of 2012.
“This supply of apartments is focused around the Diplomatic District and on The Pearl where occupation rates are, on average, 95 per cent,” the report said.
Barwa Real Estate, the Middle East’s biggest property company by assets, announced last week that it had officially launched its Barwa City master development near Doha.
The project, located in Mesaimeer, includes 128 residential buildings, and hopes to accommodate around 25,000 people when fully complete.
While a lot of the new demand is being created by infrastructure projects related to the FIFA World Cup 2022, is it sustainable in the long term?
“All of this has to go in tandem with the further diversification of the country and Doha. The World Cup alone is not sufficient to diversify the economy and drive forward all the changes that have taken place,” said Green.
And the process has already begun, he said.
“Qatar is potentially trying to create a health tourism sector, it’s increasing events and conference facilities in Doha, it’s expanding commercial sectors through finance and industry, and making many attempts to diversify.
“However, it has a lot of work to do. Qatar is heavily reliant on oil and gas, similar to other countries in the region. That needs to change,” he said.
In the short-term however, the property market remains stable.
“2011 was a year of greater stability for Qatar’s property market. There was not as much fluctuation in rents and sales prices. I think 2012 will be another year similar to that,” said Green.
“We will have significant supply across every asset class – from hospitality to office to residential this year. So for lesser quality units, you may start to see further downsides. However, premium properties will be able to maintain their rates pretty much as they are. Demand will take over, and it will be a year of stability and improvements again,” he added.
Cityscape Qatar 2012, which begins at the Doha Exhibition Centre today, will be held between May 23- 25, and is expected to attract more than 2,000 industry experts.