Qatar rents seen falling 10% in 2009

DOHA DECLINE: Cities such as Doha will see residential rents falling in 2009, according to a new report. (Getty Images)

Residential rents in Doha will fall by 10 percent this year, according to a report from Global Investment House.

Qatar’s real estate sector is showing signs of correcting as analysts predict slower economic growth amid lower oil prices and the global financial crisis, the Kuwaiti investment bank said.

“We are of the opinion that residential rental rates may go down by about 10 percent in 2009, while a major influx of expatriates in 2008 is likely to put a check on any steep decline in rental rates,” a team of analysts wrote.

Global estimates that 9,000 new apartments will hit the Doha market by 2010.

“Companies engaged in the energy and services sectors may put plans to hire more staff on the back-burner. This could hit the demand for new housing, so rents may fall in 2009,” the bank said.

Rents could rise again in 2010 as a two year rent freeze in the capital comes to an end.

Global said its medium term outlook for residential properties in Qatar remains positive.  

Demand for commercial real estate is expected to remain stagnant for the next two years as a large number of properties come on stream and the market is hit by the global economic crisis.

In the hotel industry, current expansion projects will require a significant increase in the number of tourists, or revenue per available room (RevPAR) will suffer.

“While the year 2009 is likely to witness a curtailment in business tourism, which is Qatar’s main forte, this could definitely result in a revenue contraction for hoteliers for 2009,” Global said.

“The year 2010 might witness some growth in business tourist inflow, but growth in hotel rooms supply is not likely to leave any scope of significant growth in average room rents.”

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