Qatar's huge infrastructure commitments herald a rebound in its real estate sector. As major projects get under way, market forces are really bullish. However, with the demand-supply gap in the housing market fast closing, there are serious worries whether rentals will revert to the pre-Doha Asian Games levels, when the market saw an unprecedented spike of 40-50 percent.
Qatar has lined up projects worth $100bn in the infrastructure sector alone for the next four years. Construction works worth another $22bn are expected in the real estate sector. This will attract a large number of foreign workers to Qatar, further putting pressure on rentals.
Manpower companies are busy recruiting workers. They believe Qatar's flagship projects would be in full swing by the end of this year, and the country would witness a steady inflow of foreign workers and their families by the final quarter of this year.
Potential tenants have started feeling the pinch. The asking price has already gone up in and around Doha. The biggest pressure is on mid-segment villas and apartments. Market sources say the rate of growth in the asking price has been going up since the second quarter of 2012. The average rate of growth for furnished residential units has been higher than that for unfurnished units. For furnished residential units, the average rate of growth was 7.15 percent.
In contrast to the residential market, the commercial property market is stable. Market experts do not expect a hike in rentals before 2014.
The authorities are closely watching developments in the market. Qatar Central Bank recently launched a real estate index to monitor price movements in the market and stabilise it. Data show the overall index grew 19.7 percent in 2011. The index for land rose an incredible 33.7 percent. The indices for residential properties and villas grew 14.3 percent and 12.4 percent, respectively. All the increases took place barely a year after December 2010, when Qatar won the right to host the 2022 football World Cup.