Quarterly Report Qatar Q1 2021: Residential Market Overview
Individual serviced residential land plots dominate sales activity
Residential sales continue to dominate the real estate market in Q1. Vacant land plots accounting for 53% of sales activity, while private residences account for 40% of transactions.
Recent amendments to real estate ownership laws have boosted residential investment sales, particularly in Lusail, with freehold interests in property now available for non-Qataris to purchase. Law No.16 of 2018 provides expatriate property owners with the permanent residency card privileges for property investment above QAR 3,650,000 and the benefit of a residency permit without a sponsor for owners of real estate worth more than QAR 730,000.
In the residential leasing market, we already see the impact of the FIFA World Cup, which will take place in Qatar in November and December of 2022. The expected increase in demand next year, underpinned by the proposed large-scale acquisition of apartments on government ‘Eskan’ leases, has led to a rise in the number of private tenants requesting two-year lease agreements.
The recent increase in new apartment supply, combined with the lack of expatriates moving to Qatar over the past 12 months has resulted in added value to residential tenants. Tenants increasingly insist on rental terms that are inclusive of utility bills, while the standards of internal furnishing and fittings are also improving to attract occupiers.
There has been a general shift in residential demand towards a higher quality product. This is partly due to residents increasing their rental budgets, as COVID-19 lockdown measures have enforced changes in spending patterns. Increasing demand at the high end of the market has seen areas such as West Bay Lagoon reach their highest level of occupancy since 2015. There has also been evidence of small rental increases in some apartment types in The Pearl-Qatar.
Semi-furnished, one-bedroom apartments in Porto Arabia typically command rents of between QAR 7,000 – QAR 8,000, while equivalent apartments in Bin Mahmoud are now typically leasing for between QAR 4,000 and QAR 4,500 per month.
The shift in demand towards higher quality accommodation has seen an increase in the development of fully furnished, serviced apartments, particularly in older districts close to central Doha. Serviced apartments in new high-specification buildings can command rental premiums of 50% – 80% above semi-furnished units, although development costs and operating expenses are also considerably higher.
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