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Residential property prices and rents set to fall 10% in Qatar

House prices will not be immune to the global downturn but a stable economic outlook and a rising population will prevent a severe decline, according to a report from property consultants Colliers International.

'We believe that the prices will not drop significantly, however there will be a slight correction,' said Reg Barichievey, general manager at Colliers International in Qatar.

'The impact of the global turmoil has caused liquidity to dry up which has resulted in slow downs and cancellations of developers and a lack of finance for potential purchasers,' he added.

Prices fell around 10% in the fourth quarter of 2008, the first quarterly decline during the year.

Colliers did not see any fall in rents of residential property while office rents fell 10 to 15% in the fourth quarter from the previous quarter. But residential rental rates in the country may decline about 10% in 2009 as the economy slows on the back of falling oil prices, according to a report from Kuwaiti investment bank Global Investment House.

Qatar's real estate sector is showing signs of correcting as analysts predict slower economic growth amid lower oil prices and the global financial crisis, the bank said.

'We are of the opinion that residential rental rates may go down by about 10% in 2009, while a major influx of expatriates in 2008 is likely to put a check on any steep decline in rental rates,' the report says.

'Companies engaged in the energy and services sectors may put plans to hire more staff on the back-burner. This could hit the demand for new housing, so rents may fall in 2009,' it added.

Rents could rise again in 2010 as a two year rent freeze in the capital comes to an end and Global said that its medium term outlook for residential properties in Qatar remains positive.