Landlords miss goal in Doha

Qatar's residential market is showing signs of bottoming out after several quarters of dropping price despite the announcement it will host the 2022 World Cup failing to boost the market.

Efforts to boost Doha's rental rates in the wake of the announcement that Qatar will host the FIFA World Cup 2022 failed to affect the market, a new research report reveals.

Several landlords tried to raise prices early last month, but "the weak response of … potential tenants has forced an end to these actions", the estate agent Century 21 said in its latest analysis of the market.

But Qatar's residential market is showing signs of bottoming out after several quarters of falling prices, Century 21 reported. It added that while some neighbourhoods in Doha saw drops of 2 per cent to 6 per cent, areas such as Bin Omranposted increases of 6 per cent in the fourth quarter of last year. "In general, prices are stabilising," said Diaa Noufal, the head of research for Century 21 in Qatar.

The emirate was hit hard by the slowdown in the market. In the wake of a building boom, residential sales prices fell by as much as 40 per cent in some areas, analysts said.

Vacancy rates were as high as 15 per cent to 20 per cent in some buildings. But in the past six months there has been a steady increase in sales activity, growing from 600 million Qatari rials(Dh605m) worth of property transactions in July to 1.6 billion rials in December.

Some 64 per cent of those involved land plots, Century 21 reported, which continued a trend for the past year, with sales of villas and apartments slow in the wake of the global economic crisis.

Residential rents are now averaging between 4,100 rials and 6,200 rials in most Doha neighbourhoods, although landlords in new areas, such as the exclusive man-made island The Pearl, are charging more than 10,000 rials a month, according to Century 21, which added that "the mixed growth of rents indicates a healthy market gradually progressing towards recovery".

More than 5,000 apartments were scheduled to come online last year, Mr Noufal said. Many of those units were delayed until this year, but a rush of new apartments was still having an impact on the market, he said, adding that "new supply in central Doha has driven rental rates down".

Meanwhile, the office market continues to face an over-supply situation. "There are too many towers, too much high quality and not enough tenants," Mr Noufal added.