(MENAFN- The Peninsula) By Mohammad Shoeb I The Peninsula
DOHA: Qatar's real estate prices have remained almost stable in the first-quarter (Q1, 2018) of this year compared to the previous quarter (October-December 2017), official data show.
The Real Estate Price Index issued by Qatar Central Bank (QCB) for Q1, 2018 (average of first three months index) stood at 248.98 against 250.26 in Q4, 2017, registering a marginal decline of 0.51 percent (quarter-on-quarter).
However, when compared on year-on-year basis, the price index for the first quarter 2018 (based on the data issued by the Ministry of Justice (MoJ)) has decreased by 10.91 percent compared to 279.48 Q1, 2017 (average of the January-March quarter).
According to the QCB's updated data, country's real estate price index in March 2018 inched-up to 252.08 points, showing a month-on-month increase of 2.38 points, or nearly 1 percent, compared to 249.70 points in February 2018. However, when the price index of March is compared with the index of January 2018 which stood at 245.17 points—the lowest since October 2016—, it has increase by 6.91 points, or 2.81 percent.
The index hit the highest level in March 2016 to reach 307.6 points. If the March 2018 price index (252.08) is compared with the corresponding month in 2016, it has decreased by 55.52 points, or over 18 percent over the period of last two years.
The total value of the Qatar's real estate transactions Q1, 2018 reached over QR4bn, witnessing a marginal decline compared to the corresponding period last year, mainly due to a fall in prices of real estate properties. However, the decline in prices led to corrections in rentals almost across the board making residential, commercial and retail spaces more affordable and competitive across the country.
After nearly a decade of the country's bullish real estate market, it is turning a corner. The correction in the real estate prices and rentals is bringing new opportunities and investment theme to the market—affordable luxury. The prices have moderated to a point that even the luxury units have become very affordable.
Market analysts say that easy availability of lands, a series of government decisions to support the industry and a steep fall in construction costs; all have helped strike a realistic chord with Qatar's real estate industry.
A latest review of real estate market, by a leading regional consulting firm, also echoed similar views noting that there was an increased affordability in residential capital values and rents in the first quarter of this year. Office rents became more competitive. Less pressure was seen on the retail sector, and increased occupancy for hotel apartments and 3-star hotels.
Reports suggest that there is a significant downward pressure on price due to the economic climate and additional real estate supply. Landlords and owners are reacting to this dynamic to ensure the best price whilst differentiating themselves from other similar property offerings, such as offering free rental months and free utility bills. Investors have been able to take advantage of longer term capital gains whilst others are now taking the opportunity to start looking for their next home as ownership becomes more affordable.
The new draft law for foreign real estate ownership is expected to boost sales for residential and commercial properties in Qatar, as well as increase foreign direct investment.
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