Qatar Residential Real Estate Prices Down

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(DUBAI, UAE) -- Tenants are the lucky ones in Qatar these days, according to a new report from international real estate services firm Asteco, based in Dubai. That's because an increase in supply of residential stock has brought some rents down almost 4 percent in Q2.

The Qatar Report Q2 2010 published yesterday showed that housing supply has been particularly strong in freehold areas, with apartments recording the biggest declines. Demand for rentals of high-end villas, especially in West Bay Lagoon, remains strong due to limited availability. The price of three bedroom properties remains unchanged from Q1 while four and five bedroom villas decreased 1 percent and 3 percent respectively.

As a result, tenants have more choices while landlords are beginning to be flexible. The prospects for tenants are expected to stay favorable into 2011 when more apartments become available.

Sales have remained flat, which Asteco says could indicate the market bottoming out. Expats, in particular, are looking to buy in the Pearl-Qatar rather than continuing to rent. Asteco believes relaxing mortgage requirements will help the market recover.

"Major banks in Qatar have started to promote retail mortgage products aimed at Qataris and expatriates, looking to buy property at The Pearl-Qatar. Although the restrictions on mortgages remain stringent, there are signs that banks are becoming more flexible with their lending requirements," said Jed Wolfe, Asteco Associate Director, Regional - Saudi Arabia, Qatar, Bahrain.

The report also found the oversupply of office space has forced rental prices down by as much as 30 percent, increasing interest in prime areas such as the Business District; however, that will put more downward pressure on lower grade stock.

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