(MENAFN- The Peninsula) Qatar's office and residential rental markets remained strong during the third quarter of 2014 (Q3, 14). Offices recorded high rates across locations, with robust demand at Doha City Centre area and Airport Road.
Monthly rents for residential and offices increased 3 percent QoQ and 5 percent QoQ, respectively. The sales market also performed well, while mortgage inquiries rose considerably, a latest GCC real estate report released by the Gulf Investment House (GIH) said.
On the outlook for Qatar's property market, the report noted prices could witness pressure as several new towers are added to the supply pool and buyers became more price conscious.
Inadequate supply of good quality four-and five-bedroom villas at desirable location is the key demand driver, leading to higher rental rates. In addition, one-bedroom apartments would remain in demand vis-Ã -vis larger apartments due to the strong affordability factor.
"The private sector, particularly overseas companies, would drive demand. Moreover, demand for smaller spaces and high-quality properties remains strong; however, that for low-quality properties is slightly subdued", the market commentators said.
Citing Qatar Central Bank (QCB) data, the report noted the country's real estate price index advanced 178.6 percent year-on-year (YoY) to a record high of 253.8 points in September. The index has steadily been posting gains since the level of 213.8 in May.
In the office rental market, robust demand was largely driven by improved demand from large corporate and government departments in West Bay during the third quarter. West Bay has the highest number of A-grade offices. Smaller offices also continued to witness upbeat demand due to the added flexibility.
Rentals in Doha City Centre Area and Airport Road, which have major B-and C-grade stocks, advanced due to the highest occupancy rate and low average space of about 100m2. Rentals also increased in the C and D Ring Road area, which accommodates a mix of A-and B-grade offices.
Quality properties remained in demand, whereas pressure on apartment rents in The Pearl-Qatar reduced due to the addition of numerous apartment buildings. However, there is significant demand for one-bedroom apartments and four-and five-bedroom villas at preferred locations. Rentals are forecast to improve due to limited new additions.
In contrast to the residential rental market, the sales market have performed well. Mortgage inquiries is estimated to have risen considerably over the prior year with the number of transactions declining in Q3, 14, as buyers become more price conscious as well as due to growth in the average transaction value .
Due to new supply in the market, the sales price of apartments in The Pearl -Qatar eased during the quarter. Going forward, investments in Qatar are projected to rise further. These would largely be driven by the scheduled FIFA 2022, as well as the Qatar National Vision 2030. Therefore, real estate sector activity in Qatar is anticipated to increase in the coming years due to substantial infrastructure development plans.
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