Qatar residential ROI top in Middle East …

Qatar’s residential market, which is already in a recovery phase, offers 6% to 8% returns on investment (ROI), one of the highest in the Middle East. The sector is slated to see higher rents and sales in the coming quarters, according to Al Asmakh Real Estate Development Company (AREDC).

Residential properties is one of the most prominent segments in the Qatari realty market and AREDC’s valuation and research department said owing to higher demand, well maintained units give higher and persistent return than those which are not maintained well.

Qatar has limited areas which are marked under freehold and ‘usufruct’ status, which is a right of enjoyment. It enables a holder to derive profit or benefit from property that either is titled to another person or is held in common ownership, as long as the property is not damaged or destroyed.

“Aside from The Pearl, villas that are available for expatriates to purchase are extremely rare,” the report said.

Over the last few years, residential properties have been giving stable and remarkable cash flow to investors and the demand for new properties have been surging due to the increased population, it said.

The report highlighted that apartment prices rose 5% in the third quarter (Q3) of this year against the previous quarter.

“The overall residential segment within Qatar is progressive and growing. New villa compounds may be required to be built in neighbourhood areas of Doha. Rental and sale market seem to perform well in upcoming quarters,” the report said.

Demand for new properties has been surging due to the increased population, it said.

As per the latest official figures, Qatar’s population reached 2.07mn in November this year: a 12% year-on-year growth.

Although demand from retail and institutional investors for residential properties have been considerably increasing, the AREDC report said due to lack of adequate supply, properties are merely changing hands without contributing much in new supply within the residential market.

An apartment in The Pearl, which was available at an average price of QR14,000 per sq m, now fetches an average of QR15,000 per sq m.

In addition, the average price for a two-bedroom apartment has increased to QR3.35mn from QR3.2mn. Similarly, but not equally, substantial growth can be seen in West Bay and ‘usufruct’ areas as well, it said.

Due to very limited supply within usufruct areas, demand from retail investors for an apartment remains top of the mark, the AREDC research wing said.

Finding that sale prices for apartment have been surging ever since 2011, it said “unlike neighbouring countries, this appreciation is stable and continuous.”

The most desirable residential accommodation is one-bedroom and two-bedroom apartments. In Q2, 2013, the appreciation in rental for such properties across all areas was in the range of 2% to 5%, the report said.

It said the Pearl remains one of the priciest in terms of rental, followed by apartments in West Bay.

Average monthly rental for two-bedroom apartments at The Pearl is QR15,000, whereas, similar apartments at West Bay is QR13,500.

In terms of apartments, ‘usufruct’ areas like Al Sadd, Bin Mahmoud, Musheireb, Rawdat Al Khail and Umm Ghuwailina remain favourite for budget households, it said.

The average monthly rent for an apartment may vary between QR7,000 to QR12,000 in these localities, it said.

The most anticipated locations for villa compounds are Al Waab, Salwa Road, Madinat Khalifa and Al Gharraffa where three to four bedroom villa in such a compound may be available at a monthly rental of QR13,000 to QR18,000 depending on the specification and location of the compound. Gulf Times

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