the riyal estate cover story
property developers and it will be implemented. The law is currently being discussed by the Advisory Council. The need for such a law was felt with the increase in cases of fraud committed by real estate firms who doubled up as property brokers. The draft of the proposed new legislation makes it mandatory that only companies owned by nationals will be granted a license to operate the agencies, and the Manager of such a company will have to be a national. Commenting on the impending law, one of the real estate agencies in Qatar, DTZ Associate Director, Mark Proudley says, "It's a positive step towards regulating the real estate market here and also in delivering a greater level of consistency of approach amongst agents. DTZ aren't all Qataris, but we are a Qatari company and we are licensed to operate as a real-estate agent. I think anything that introduces licensing is a positive step to increase levels of professionalism and accountability. "I think it's important for people making property deals to know that they are dealing with a body that has a professional approach and is to some degree regulated effectively." Another real-estate agency, Coreo, reflects similar sentiments. Its CEO, Khalifa Al-Misnad, says, "A regulated real estate market in Qatar will add much needed transparency to the market place, which is especially needed at this time when the world is looking at investing in Qatar's market be it from a rental or sales perspective. There have been incidents in the past unfortunately where purchasers and tenants have been scammed by individuals acting as 'real estate agents' – effectively anyone with a mobile phone could pose as one – so regulating the industry adds to consumer confidence." He adds, "It is difficult to quantify market data in a market place that is segmented with countless middle men. Now that transactions will be more centralised to the confines of real estate agencies, it will be easier to consolidate transactional data in the sector to better gauge the market value." Al Fardan Properties, COO, Muhibullah Mani agrees, "We can also expect stability in real estate prices with the introduction of the new law, while preventing superficial changes in market prices."
of Gulf Organisation for Research & Development, who was previously the CEO of Barwa Real Estate, there is but a steady growth in the sector, but figures have yet to return to the high levels recorded during 2007. He says: "Land prices are quiet high and still increasing though transactions for huge projects are not happening as there is less liquidity in the market. This is because loans are still not as available as before – the market is too cautious. But there is movement in small villas and land deals aided by subsidies on land by the government and the loans offered to Qataris through Qatar Development Bank."
Uncertain market? According to Dr Yousef Al-Horr, Chairman
Khalifa Al-Misnad,
50 Qatar Today
september 2011
"It is difficult to quantify market data in a market place that is segmented with countless middle men. Now that transactions will be more centralised to the confines of real estate agencies, it will be easier to consolidate transactional data in the sector to better gauge the market value." CEO, Coreo
He feels that there is lack of demand and this is stemmed by the fact that the government has not revealed all of its plans for 2022. Though the infrastructure plans have been revealed there is still ambiguity about other projects. This is echoed by property expert, Mansur Al-Mansur, who says in a local newspaper that the slow performance of the sector was normal as it was awaiting the announcement by the government about plans pertaining to the FIFA World Cup 2022. But the good news is that banks have been a bit more lenient in 2011. Experts believe that if the momentum of loan disbursal is maintained at January-May 2011 levels, the volume of credit dispensed to the real estate sector might cross the magical QR25 billion-mark by the year-end. Banks and real estate In the aftermath of the global recession that began raising its head in 2008, banks here were quite strict when it came to parting with cash for 'risky' property investments. The banking industry, post-recession, pursued a cautious lending policy as far as individual consumers and real estate investors were concerned despite the fact that the state propped up its exposure to the real estate sector with QR15 billion. There is enough liquidity with the banks now and the sagging real estate sector is looking up in anticipation of the launch of mega projects. "A lot of people are buying land and housing units in the hope that real estate prices will go up driven by increasing demand," a market source said, attributing the phenomenon to the country winning the 2022 bid. The total credit offered by commercial banks to the real estate sector, the second largest recipient of loans, grew, touching QR59.97 billion, in May 2011. This is in comparison to just QR39.19 billion during the previous year. As per the data by QCB, the realty sector constitutes 19.9% of total domestic credit. This signifies a change and the players in the market agree. Al-Misnad says, "We've seen a huge interest in people interested in purchasing in areas such as the Pearl, West Bay Lagoon, and even Lusail, where nothing has been built yet. One of the most dramatic influences of this change was Qatar being selected for the World Cup in 2022. Individual residents and investor confidence has increased due to the Bid win, and now people see Qatar