Doha property price rises pushing up rent

Developers are stalling new projects until prices come down

Property prices in Doha are rising at worrying levels.
Property prices in Doha are rising at worrying levels.

An increase in Doha property prices, particularly plots of land, has pushed rentals for homes and commercial space sky high.

Rentals may increase by 10% by the end of the year if the upsurge continues, according to industry experts.

And the rise is also affecting supply, with developers stalling new projects due to low profit margins and smaller expected returns on investments, local Arabic daily Al Raya has reported.

They say that despite high demand and shortage for housing units and commercial space, real estate transactions during the third quarter of the year remained low, largely due to the high prices of properties.

Many investors see the prices highly inflated and fear a price bubble in the real estate market.

"The market slowed down in Q3, 2014, and the same trend is expected to continue over the next couple of months. Sales may pick up momentum only in the beginning of next year," real estate expert Khalifa Al Musalman, told Al Raya.

"Since the prices of plots of land and other properties have gone through the roof, developers and investors are finding them less attractive to invest as they expect a very negligible profit margin on their capital."

He said investors are also reluctant to put their money in new projects due to inflated prices and believes this is the reason the real estate market has slowed down.

Al Musalman said at a time when the country needs more housing units, developers are withholding their projects and investment decisions, hoping for the prices to come down.

Even prices of high-end apartments, such as those in the Pearl-Qatar and Lusail, have increased and may continue to go up further next year.

 

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