Several real estate projects slated to finish in 2012 have given Qatari economists hope the real estate sector will overcome the recession that undermined the market in 2011.
The supply of housing is still higher than demand, but demand has started to increase recently, Ali al-Obaidli, managing director of Ezdan Real Estate, told Al-Shorfa.
"Demand in the real estate market improved slightly as of late, notably for parcels of land outside of Doha, whose prices have increased up to 10%," he said.
Al-Obaidli said Qatar's general budget, scheduled to be adopted in April, will establish the amount of public spending on real estate.
"If spending falls short of projections, the market will not see the desired degree of improvement, especially given the ongoing global economic crisis and its negative impact on regional economies," he said.
Qatar's Public Works Authority announced in February that public spending on infrastructure projects and construction during the next seven years is expected to reach 100 billion riyals ($27.5 billion).
The rise in spending on infrastructure projects will help move the market, which has been mired in a recession the past two years, al-Obaidli said. He added that government spending is the only way to facilitate growth within most sectors, including real estate, in the near future.
Others said infrastructure projects and foreign companies hoping to enter the Qatari market will help stimulate the sector.
Demand for housing in the past two years dropped 30%-40%, said Ibrahim al-Abdullah, an economic analyst with the Qatar Stock Exchange. He said, however, that he expects the real estate market to recover this year, spurred by infrastructure projects.
"There have been signs indicating the beginning of a recovery, especially in the last quarter of 2011. It is still modest, however," al-Abdullah said.
Al-Abdullah said the consumer price index for rent has begun to rise gradually, coinciding with increasing demand in many Qatari cities.
"I believe that when projects for the 2022 World Cup start, they will help lift the real estate sector," he said. "Approximately 100,000 apartments will enter the market in the next four years, and several major companies will begin work."
"[This] translates into an increase in the labour force, which will herald a near-term market recovery," al-Abdullah added.
Management consulting company Tanween recently predicted that the appeal of Qatar's real estate sector would be strong once again in 2012.
The company issued a report earlier this year noting that the Qatari real estate market began recovering in December 2011, a month that marked a substantial leap in the number of the sector's transactions.
Data from the real estate registration department at the Ministry of Justice included in the report showed that the volume of real estate transactions in December 2011 increased 26% compared with the previous month. Trading volume, the amount of transactions conducted in a certain period of time, grew from 1.9 billion riyals ($522 million) in November to 2.4 billion riyals ($659 million) in December.
"Demand for housing improved tangibly in the fourth quarter of 2011 but not to the level the real estate market witnessed before the global financial crisis began," said Talal al-Balawi, an economic analyst with Tanween.
Al-Balawi told Al-Shorfa he expects rent prices to increase gradually during the year, driven by an expected increase in demand from foreign companies wishing to operate in the Qatari market.