(MENAFN- The Peninsula) The Qatar Central Bank's (QCB) real estate price index hit a record high in June 2014, surging to 230.6 points, or 28.97 percent, up compared to a year ago. The second quarter price index released by the QCB yesterday shows that the country's real estate prices have been going up over the past three months except in May, after hitting a high of 209.4 points in March, 2014.
The index jumped from 209.4 points in March to 216.0 points in April before marginally sliding to 213.8 points in May, 2014.
According to the Central Bank's index, a measure that tracks the country's real estate price movements, Qatar's real estate market was volatile during 2013. The price index which hit 180.1 points in March 2013, was seen growing up to 190.4 points in May 2013 before sliding to 178.8 points in June 2013. It further slipped to 174.2 points in July before jumping to 189.8 points at the end of 2013.
The year 2014 saw a steady increase in the overall market price. The index jumped to 194.5 points in January from December 2013 to touch 195.3 points and 209.4 in February and March respectively. The index surged to 216.0 points in April and 213.8 points in May before hitting the record 230.6 points in June, when the country's total real estate transaction value hit QR3.9bn.
Industry reports noted vacant plots maintained the highest value of transactions compared to other real estate asset groups recording QR2.4bn, recording an average 61 percent in June. Villa transactions recorded the second highest transaction value, recording approximately QR1bn worth of deals, making 25 percent of the total, 'Century 21 Qatar' revealed last week. Total number of transaction deals reached 627 in June with vacant plots top the list with 446 deals.
Real estate and contracting sectors together make up one of the biggest shares of commercial banks' total domestic credit facilities in Qatar. The banks' exposure to the real estate and contracting sectors jointly stood 20.29 percent of total credit facilities, second biggest chunk after the public sector.
QCB's review said the commercial banks' total domestic credits stood at QR547bn by the end of March 2014. The loans to the real estate sector and contracting sectors together accounted for QR111bn, with the real estate having the bigger share of QR85bn, slightly down from QR86bn availed a year ago.
The ratings agency Standard & Poor's said in May that there is a slight increase in Qatari banks' cost of risk because of additional provision on loans to contractors and real estate developers.
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