Analysts expect Qatari real estate recession to end in 2012

Cranes are seen above buildings under construction near the Barwa Financial District in Doha. [Fadi Al-Assaad/Reuters]

Cranes are seen above buildings under construction near the Barwa Financial District in Doha. [Fadi Al-Assaad/Reuters]

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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.

Infrastructure projects will spur recovery

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.

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    عمر واسط

    2012-4-20

    I see that the State of Qatar has a strong economy that enables it to achieve all this development. I also see that what the Arab region is going through, including the deterioration and events because of the Arab revolutions, is a catalyst to the economy of Qatar because these events have contributed to the orientation of many tourists to the State of Qatar. Also, many investment firms and businessmen from different countries of the world are looking for security and stability in managing their businesses. Therefore, a lot of them today are in Qatar. All of these reasons contributed to the recovery of the economy of Qatar, its great success and strengthening by making this paradigm shift which enabled Qatar to become one of the strongest countries in the world at the economic and financial sides. It is also number one on the Arab and Gulf level. Its economy is moving steadily and is continuously growing. Therefore, we see that Qatar today is witnessing all this stability, prosperity and reconstruction in all the areas. This is a clear evidence of the success of its economy and its strength.

  • صفاء نوري

    2012-4-20

    Qatar is considered among the Gulf countries that have taken a lot of steps and expanded in their achievements in a way that made the economy of the country reach what it is in the last years of growth and escalation, and made Qatar among the most successful countries in managing its economy. Therefore, I believe that the Qatari economy is accelerating in growth, witnessing further developments and progressing year after year. I think that the oil wealth owned by the State of Qatar and its policy in reviving its economy through the proceeds of oil wealth have significant impact on promoting the realities of the economy of Qatar which its sources diversified and no longer depended on the oil wealth alone, but Qatar has succeeded in opening. Qatar has succeeded in opening more streams of reviving its economy and also focused on the tourist side in this country. It also gave attention to the sports side which made Qatar a country racing against the world's major countries to organize the largest sporting tournaments, including winning the organization of FIFA World Cup 2022. All of these are motives and indications of the success of the economy of Qatar as well as contributing factors a great renaissance that it is experiencing.

  • بدر عبد الله

    2012-4-12

    The economy in Qatar without a doubt is free and strong and in the process of progress. It is the fastest growing and most rebounding. The State of Qatar is witnessing important and huge growth and booming economically after they started many oil and gas industries as well as petrochemical projects that pay substantial financial returns because of the high added value of these industries. It is natural that these revenues affected positively the overall Qatari economy in order to expand the development of industries in various forms and lead to an increase in the capital in companies, banks and per capita income, and the gross domestic product (GDP) witnessed dramatic evolution as it jumped from about "38" billion at the end of the nineties to around "105 "billion riyals by the end of 2004. The State of Qatar occupies a leading position in the Gulf and the Arab world in terms of speed of growth in economic, political and social development. In this context, Qatar has been able to double its oil production capacity in recent years due to the efforts of continued exploration and development, which helped to achieve the maximum benefit from the sharp rise in oil prices. Qatar's economy was able to achieve a rapid growth of 9 percent per year since about 2000 and referred to the fact that the projects of oil and gas development are associated with great efforts to create a strong industrial base and develop the service sectors, infrastructure, health, education, and various other sectors as well as support the role of the private sector through liberalization policies and economic and political reforms.

  • منشد الحلان

    2012-4-12

    It is necessary for the authorities to show more care and attention to the economic issues which could play an important and effective role in the country's development and prosperity. Authorities should also seek to establish and develop all aspects of life. They should provide the Qatari citizens with all their needs. Therefore, the economy is an important issue for the State, the Government and the people. In fact, the only parameter for successful countries is their control over the reins of the economy. The extent of economic prosperity is strong evidence of the comfort of the people and their high living standards. The economy shows the development of peoples in all aspects of life. Therefore, the economic situation of any country is very important. The States should appoint specialized experts in order to make effective plans for an economic recovery. As for the price fluctuations of natural gas and oil, and their effects on the global economy, I think that this issue is very important in terms of prosperity. Thus, it is important to control the prices of natural gas and oil since their financial revenues are very high. Money is very important for countries that export crude oil and natural gas.

  • مؤيد

    2012-4-12

    Qatar's economy enjoys much interest and care. Thus, it is witnessing a very high rate of growth. In fact, the developments, progress, expanded activities, and successive and fruitful activities have contributed to its development. In addition, Qatar is carrying out trade activities, contracting and dealing with foreign companies and investments that contribute in promoting the country, the work of banks, and the work on attracting tourists to the country, and putting Qatar on the favorite destinations map for them have also played a major role in addition to paving the way for sporting activities. In fact, this issue plays a positive and effective role. For instance, hosting the 2022 FIFA World Cup and these activities will provide the best results which are important for wealthy countries. This issue has played a considerable role in promoting the Qatari economy. Thus, Qatar enjoys a lot of interest and care from the part of the officials and experts as well as those who are interested in the life issues in Qatar. This aims to find huge projects and developments that work on promoting the Qatari economy in a quicker, bigger and more comprehensive way. Indeed, I personally wish all the success for Qatar. I also hope that all the other Arab countries will follow it and witness such an improvement and development in terms of the best choice, work, successful planning, and ideas that reflect intelligence in selecting all the best things. Indeed, these countries must work on maintaining the interests of their people who have been deprived of their basic rights.

  • HADOO

    2012-4-10

    In my opinion, I see that Qatar does not suffer from the weakness of the internal economy because as we know, Qatar’s population is above the poverty line because their numbers are very few and the area of their country is small in comparison with its oil production and exports, which bring huge returns. Therefore, I see that the internal economic situation in Qatar is good, but the problem is that there are not sufficient investments in Qatar to push the economy forward and work on developing it. This is the question about which the Qataris must think of because if it ended on any day, the economic situation would deteriorate. The current reliance in Qatar is on income from oil exports only, which means that if the oil dried up at any time, the economic situation will detonate because they depend solely on oil income. Finally, I would like to say that the government of Qatar has to work on strengthening its internal economy, adopting the open-market policy and making all the necessary preparations to face the depletion of the oil reserves one day. However, I would like to say to the Qatari people that they are lucky because its government provides them with all the requirements of the good life and makes use of the oil resources to maintain their welfare.