DOHA: With the fall in residential rents throughout the first 9 months for the year, rents for housing units stabilised to some degree in fourth quarter of last year (Q4, 2016). Overall, residential rents fell by an average of between 5 percent and 10 percent in 2016, said DTZ, a leading real estate services firm in a presentation yesterday.
There has been an increase in good quality ‘affordable’ accommodation in peripheral suburbs, and it expects that the completion of additional residential property in 2017 will help to relieve the upward pressure on rents, which has been experienced in recent years.
Demand for residential accommodation in areas such as the Pearl-Qatar, West Bay, Al Sadd and Bin Mahmoud, has fallen from pre-2015 levels as the fall in oil prices reduced the recruitment drive that had been in evidence since 2011. Reduced demand, coupled with an increase in supply of prime and secondary housing units, saw rental levels decrease in many residential neighbourhoods for the first 9 months of 2016, however recent months have seen rental levels stabilise.
Commenting on the hospitality sector, hotel performance declined in Q4, continuing the trend witnessed over the past two years. The fall in occupancy rates and revenue per room is a result of a fall in tourist numbers to Qatar, coupled with significant new supply that has come to the market since 2014.
On the supply of retail space, DTZ said with the opening of Qatar’s largest retail mall, Mall of Qatar, in the fourth quarter, the total supply of organised retail supply has now increased to 838,000 square metres (sqm).
It also highlighted that the retail real estate market continues to perform strongly in Qatar despite a reported fall in retail sales of between 10 percent and 15 percent since 2015.
“In November, Qatar signed up to a cut of 4.5 percent in crude output as part of Opec’s attempts to boost oil prices by restricting production. It is hoped that the Opec deal will restore confidence in the economy and in the real estate market in Qatar, after a period of uncertainty,” noted the report.
Providing an update on prime office market outlook, it said that the rents for office space fell by an average of between 10 percent and 15 percent in 2016, due to lower demand and an increase in new supply. An increase in demand witnessed in Q4 will need to be maintained to avoid market oversupply levels in 2017 and beyond.
