After years of acute housing shortage, the supply-demand gap is narrowing in Qatar, said the property consultant Landmark Advisory in a survey. "The situation is already reversing," said Jesse Downs, the director of research and advisory services. "The assumption was that Qatar's booming economy, based on petroleum exports, had attracted large inflows of expatriate professionals. However, this assumption does not bear close scrutiny."
According to the Landmark's Qatar Real Estate Report for the second quarter, Qatar's petroleum industry employs only 5 per cent of all expatriates, but accounts for roughly 70 per cent of GDP. "Since a large portion of construction workers live in labour compounds, they do not contribute to demand for individual housing units. So, it is misleading to assume that Qatar's recent population growth is matched by a comparable increase in residential demand."
The changes in the supply/demand ration has already been reflected by market-wide price declines. The report shows that between mid-Q408 and end-Q109, average sale prices in areas where foreigners can purchase properties fell 25 per cent to 30 per cent. "The declines were heavily weighted toward The Pearl, where average unit prices dropped 35 per cent, indicating a sharp fall in demand from foreign investors," said Ms Downs. Average prices for units in the Zig Zag Towers and Lusail also declined, but only 10 per cent to 15 per cent.
Turning to the rental market, average villa rents fell 15-20 per cent in the first two months of 2009, while apartment rents remained stable. According to the report, Doha is undersupplied by 1,500 units but expects delivery of 33,000 units by 2012.
