By MOBIN PANDIT
DOHA: Real estate transactions in the country peaked to QR535m last week, with a top real estate expert attributing it to what he described as “distress sale” by property owners as they have to begin repaying their bank loans.
The banks have been chasing those who took real estate loans at the height of the housing shortage in the country during 2007-08, so they can start servicing these debts, says Nasser Al Khaledi.
The record rise in real estate deals at almost the fag end of the year is mainly due to distress sale, Al Khaledi, who is CEO of Qatar-Oman Investment Company (QOIC), told The Peninsula yesterday.
“Most of the people who are offering property for sale are desperate for cash so that they can begin repaying the bank loans they sought for real estate development during the acute housing shortage,” said Al Khaledi, whose company is listed on the Qatari bourse (Qatar Exchange).
Naturally, no one wants to go to court or jail (because of defaulting on loan repayment) so people instead prefer to offload their properties. “This, obviously, is a wiser option for them,” said the CEO.
According to him, the QR15bn the state pumped into the local banking system to manage doubtful real estate debts after the onset of the global recession when property prices began crashing, couldn’t resolve the problem because the pump-priming was insufficient as almost three times that sum was blocked in the local real estate sector.
“The problem wasn’t analysed properly,” said Al Khaledi. The tenures of doubtful real estate loans should have instead been extended and the lending terms eased. This way, the banks would have earned much more in interest,” said Al Khaledi.
The QR535m figure of property transactions was mentioned by Qatar News Agency (QNA) yesterday, which said most deals were struck in Doha, Al Wakra, Al Rayan and Umm Salal, among other places. Sources in the real estate business, meanwhile, say buyers are upbeat about the market picking up fast if Qatar wins the 2022 bid which is to be decided tomorrow. Even otherwise, the government is holding back many big public projects which it might begin launching soon.
“So people hope that the real estate market should eventually start looking up and they should get good returns,” said a source.