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Property rents set to fall in Qatar and Abu Dhabi

Up to 9,000 new apartments are due to be completed in Qatar in 2010 and an estimated 100 tower projects are either already underway or planned to be launched during the next few years, despite the current slowdown in construction triggered by the global economic crisis.

'We expect supplies and rentals to ease between 20 and 25% after six months and beyond,' said Mohamed Sabih Bukhari, who works in the building industry. Rents were already down by an average five to 10 percent, he added.

Demand was easing as a result of the economic problems, but despite this all the new apartments were expected to be filled by next year, added P N Baburaj, who runs a real estate agency.

Demand for high-end housing was still expected to remain high as the government was increasing spending on infrastructure projects and the oil and gas sector Baburaj added.

Elsewhere in the region rents are remaining stable. Residential and commercial rents in Abu Dhabi, for example, have not been cut by landlords as a result of the economic downturn even though experts forecast that the rents would fall by 15 to 20% from last month.

Now analysts expect that there will not be a downturn in rental prices until June. 'We predicted in a study that the prices of residential and commercial properties and residential rents would drop by 15 to 20% starting last month because of the impact of the international crisis,' said Ridha Muslim.

He admitted this has not happened and said this was because there is still a shortage of supply unlike Dubai where rents are falling.

The situation in the capital was totally different to the one in Dubai because demand for property still outstripped supply, Muslim added.

'But by June rents and property values should have fallen by 20% as a result of an exodus of expatriates and more units being completed bringing demand and supply inline,' he added.