Approximately, 8,600 residential units are projected to be added in Qatar during the remaining quarters of 2020, assuming there are no construction delays, consulting firm researcher ValuStrat has said in a report.
Total housing stock by end of Q1, 2020 was approximately 299,100 units with the addition of 900 apartments and 500 villas during the quarter, ValuStrat said in its first quarter report on ‘Qatar housing market’. All new additions were during the first two months of this year, it said.
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Approximately 60% of the new additions came from Lusail with completion of ‘Maison Blanches’ compound and towers in Al Kharaej district and Al Erkyah district.
As per ValuStrat research, based on latest (March 2020) population figures, the total number of households is estimated at 224,000, making the total oversupply exceed approximately 75,000 units.
This oversupply is projected to increase by end of 2020 due to projected influx of supply in remaining quarters and probable fall in households.
As per the latest Labour Force Survey published by Planning & Statistic Authority (PSA), 7% of the population (approximately 190,000 employed workers) are “service workers and shop and market sales workers.”
Providing insights from some major real estate developers, ValuStrat said some delays are to be expected in completion of ongoing projects due to reduced number of labourers and logistical adjustments in supply chain.
Furthermore, most developers are reluctant to release new supply in the coming three months due to expectations of slowdown in demand and rent reductions.
Liquidity was not quoted as a major problem amongst developers, as some have quoted approaching the banks for deferment of debt commitments or other facilitating changes in loan contracts for the next six months.
Launches of all new real estate projects including residential developments has been postponed for the next three to six months in order to minimise risk and limit cash flow problems, ValuStrat said.
On major factors, which might impact residential sector, the researcher noted there might be a shift towards lease renewals compared to new leasing activity.
Tenants temporarily unable to physically tour new spaces and due to increased risk of shifting during this period (of Covid-19) prefer remaining within their existing premises.
Landlords concerned about increasing vacancy are likely to provide short-term deals for existing tenants.
Any potential decline in leasing activity and an increase in renewals/extensions could cause a short-term decline in the “trading up” trend observed since the past year. This might limit increasing occupancy of prime locations in the short term, ValuStrat said.
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