Vacancies in Qatar's property market have increased in the past six months due to job losses in the oil and gas sector, according to a new report by real estate consultants DTZ Qatar.
Its Q3 2015 market report highlights the impact that the government's revisions of its spending plans has had on Qatar's real estate market.
The report said that despite the increase in vacancies, rents have remained strong during Q2 and Q3, primarily due to an increase in population.
The population of Qatar reached 2.37 million in May, representing an increase of 9.2 percent year-on-year due to steady job growth in non-hydrocarbon sectors such as finance, hotels, restaurants, and trade and transport.
DTZ Qatar said the commercial sector has witnessed a reduction of new office acquisitions from the public sector. Typically the public sector accounts for 60 percent of office leasing in Doha's West Bay area.
Most of the Q2 and Q3 activity has been limited to transactions of less than 250 sq m and there have been no commercial leases in excess of 3,000 sq m agreed in Q3.
Johnny Archer, associate director, Consultancy and Research, DTZ, said: "Declining oil and gas prices have resulted in a review of the budgets in many government departments and in the oil and gas sector; however, the government has recently confirmed that spending on infrastructural projects will proceed as planned.
"The key concern in the residential sector is rental inflation where new supply of accommodation for the middle income families has struggled to meet the demand of an increasing population.
"There has been an increase in vacancies in the prime residential market in recent months; however, with non-hydrocarbon sectors experiencing double-digit growth, occupancy levels are likely to recover over the next six months."
Kenneth Corbin, head of commercial agency, DTZ Qatar added: "Whilst the residential market is showing signs of resilience during this period of government review, the commercial sector is likely to be challenging in the near term as landlords look to the private sector to fill the temporary void in government take up. In our opinion, those landlords offering the most flexibility in lease terms will reap the greatest benefits."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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