Demand for residential and commercial property in Qatar has seen a significant slowdown in the first quarter of 2016 due to cuts in government spending, according to a new report.
DTZ Qatar's latest report said most commercial real estate lettings during Q1 are for small office spaces, which are in demand from the private sector.
It is estimated that between 2009 and 2014 as much as 65 percent of commercial space was taken up by governmental and semi-governmental entities but this demand has reduced "significantly" in the past 12 months, the report said.
It added that an increase in population, which continues to be fuelled by growth in the private sector, is accounting for demand in low to mid-level priced homes, while prime real estate is seeing "lengthening voids" in some cases.
Mark Proudley, associate director, consultancy and research, DTZ, said: "While the real estate market remains in flux, the macroeconomic outlook is solid... However, the waning price of oil continues to threaten the government's budget.
"The need to decrease spending is challenged by the requirement to keep pace with developmental requirements ahead of 2022. The current cost of projects underway is QR261 billion. This excludes projects in the energy and private sectors."
DTZ said Qatar's retail sector is seeing high occupancy rates across sectors while the hospitality sector is experiencing a decrease in occupancy rates with 15 new hotels and hotel apartment buildings having been opened in the past year. Currently, supply has reached 20,000 rooms.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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