Apartment rents reduce to levels prior to World Cup
Johnny Archer, Director, Consulting & Research at Cushman & Wakefield Qatar
Doha, Qatar: The second quarter (Q2) of the year saw a significant fall in most apartment rents and a return to the levels seen before the escalation in rents created by the FIFA World Cup, Cushman & Wakefield said in its Q2 2023 Real Estate Market Review released during a seminar held at Hilton Doha, yesterday.
Speaking during the second quarterly real estate market seminar, Johnny Archer, Director of Consulting and Research at Cushman and Wakefield said, “The addition of new apartment supply in recent months, including developments at La Plage South and Giardino Village on The Pearl Island, and in Lusail has resulted in increasing availability of prime apartments, resulting in downward pressure on rents.”
“Elsewhere, the release of almost 7,000 apartments in the Madinatna development in Al Wakra has significantly boosted the supply of modern, budget accommodation, providing direct competition for established residential neighbourhoods in Al Wakra and Mesaimeer.”
He added, while occupancy rates in Doha’s prime residential villa compounds remain strong, there has been an indication of growing vacancy in the compound villa sector overall, which coincides with the end of the school year. While rental levels have not fallen to the same degree as in the apartment sector, a return of rent-free incentives to attract new tenants suggests a fall in net-effective rents.
The majority of one-bedroom apartments in The Pearl Island can now be leased for between QR6,000 and QR8,500 per month, depending on the location and quality of the building.
Most three-bedroom units on the Island are now available for between QR13,000 and QR15,500 per month. In Fox Hills, one-bedroom apartments are now typically available for between QR5,000 and QR6,500 per month, with three-bedroom units now commanding between QR8,500 and QR10,000 per month, the real estate consultancy report noted.
Qatar real estate market’s most challenging period is likely to be in the coming two to three years as the market absorbs oversupply and we transition to a more stable supply-demand-driven development climate.
Also, speaking during the seminar General Manager and Head of Middle East, Edd Brookes, said, “The importance of making informed real estate decisions requires expert advice. Cushman & Wakefield adheres to all international best practice and Qatari Ministry of Justice licensing and regulations – we are always delighted to assist with impartial advice.”
He added that “no doubt the various international events including Expo 2023 will continue to put Qatar on the global map and show case Qatar real estate as a safe and regulated market for domestic and foreign investment as well as a peaceful place to live.”
Residential sales transactions continued to decline in Q2. According to the Planning and Statistics Authority, the number of residential sales fell by 22.6 percent in April and May compared to the same months in 2022.
To help boost the residential sales market, several measures have been introduced in recent months to complement the ownership reforms introduced in 2019. The Ministry of Municipality and Environment (MME) has announced the imminent introduction of a Real Estate Regulatory Authority which will increase transparency in the market and enhance statutory and legal protections for investors.
In addition, Qatar Central Bank recently announced a series of amendments to its real estate financing (mortgage) regulations. The amendments – aimed at protecting the financial sector and boosting the residential sales sector – have redefined the loan-to-value rates and maximum mortgage terms for Qatari nationals and expatriates.
Source: The Peninsula