Property developers in Qatar are learning lessons from Dubai’s sharp real estate and development crash by slowing and rethinking projects.
Analysts say that the move which will help property prices recover next year.
Qatar developer Barwa Real Estate said on Tuesday it has delayed its $8.3 billion (30 billion riyal) Al Khor project due to sluggish market conditions, the latest sign that the world’s largest exporter of liquefied natural gas is grappling with oversupply.
The project, a mixed-use city north of Doha, was originally expected to be completed in 2015, but a company spokesman declined to give a new completion date.
JP Grobbelaar, director of research and advisory at Colliers International said: “This, coupled with what they saw in Dubai, caused developers to put the brakes on certain developments,”
Patrick Rahal, senior analyst at investment bank The First Investor said: “House prices in Qatar, down about 30 percent since the crisis, are seen falling further by 10-15 percent in 2010 before recovering next year as property companies better balance supply to the market.”
In contrast to Dubai, Qatar did not witness the same flawed speculative building model which imploded and caused house prices to tumble some 55 percent from their peaks.
Dubai was the Gulf Arab region’s worst hit property market, with billions of dollars worth of projects put on hold or cancelled.
House prices in Dubai are set to fall a further 10 percent this year, with prices recovering in 2012, a Reuters poll in July showed.
An analyst, who declined to be named, said: “There is oversupply in Qatar, especially in the commercial segment and so it is a sensible move to learn lessons from Dubai. Delaying projects or rethinking them is not all that bad for Qatar.”
Barwa – Qatar’s second largest developer by market capitalisation – is an affiliate of the country’s sovereign wealth fund, the Qatar Investment Authority, which holds a 45 percent stake in the company.
Follow us on
