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Wed 20 Jan 2010 03:55 PM

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Qatar rents flat during Q4 2009

Asteco's latest property report says villas market continues to outperform apartments in Gulf state.

Qatar rents flat during Q4 2009
PEARL PROJECT: 1,200 apartments are due to come on to the market at Pearl Qatar in Q1.

Qatar's residential rental market remained flat over the last three months of 2009 but witnessed a marginal increase in interest from tenants assessing the market towards the end of the quarter, Asteco said on Wednesday.

The real estate services firm said the more established villa market continued to outperform apartments.

"The leasing market is expected to see continued activity in 2010 as real estate projects reach completion and the oil, gas, infrastructure and logistics industries continue to attract foreign inward investment," said Asteco in its report on the Qatar property market for the final quarter of 2009.

In Doha's less-established areas, monthly rental levels for one-bedroom apartments ranged from QR3,500 up to QR4,000, two bedrooms from QR5,000 to QR7,000, and three bedrooms ranged from QR6,000 to QR8,000 per month, the report said, while apartments in the prime areas of West Bay and Lagoon Plaza ranged from QR7,500 to QR12,000 for one bedroom, QR11,000 to QR18,000 for two bedrooms, and QR15,000 to QR20,000 for three bedrooms.

"The more mature villa market in this area continued to outperform the less established apartment market, with three-bedroom villas achieving 10 to 20 percent higher rental levels than three-bedroom apartments," Asteco added. "Indeed, villa vacancy rates in this area are currently estimated at 4.5 percent.

Asteco said apartment sales continued to show a discrepancy between the primary and the secondary markets, highlighting an increase in the number of existing owners wishing to liquidate their investments while still at a break even point.

Secondary sellers have a competitive advantage over developers who are locked into high construction costs where contracts were agreed at the peak of the market, the report added.

Asteco's research showed a current discount on secondary stock of around 25 percent, which broadly reflects early 2008 pricing.

"There has been limited activity in the off-plan sales market in the freehold and long leasehold zones, which are available to expatriates, and marginal activity within the greater Doha market, available to local and GCC nationals," the report added.

The Pearl Qatar remained the premier project where 1,200 apartments are scheduled for delivery in the first quarter of this year, which is expected to provide long-awaited evidence to benchmark the Pearl within the wider property market.

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