August 18, 2021

Quarterly Report Qatar Q2 2021: Residential Market Overview

Occupancy rates climb in prime locations as residents capitalize on reduced rents

Demand for apartments in locations like The Pearl-Qatar, West Bay, and Lusail’s Marina District surged in recent months as residents take advantage of the more affordable rental levels in these areas. In addition, our research shows that residential tenants increasingly prioritise their rental budget, with reduced spending on international travel and holidays, primarily due to COVID-19.

Occupancy levels in The Pearl-Qatar and West Bay Lagoon are currently at their highest point in more than four years. This has led to some evidence of rents increasing for certain apartment types, although most rents remain stable, as they have been over the past year.

The vast majority of rental activity has been generated by those re-locating within the country; however, there have been increasing signs of new residents moving to Qatar, largely on projects that are either directly or indirectly related to the FIFA World Cup in 2022.

The importance of high-quality building finishes and amenities has become more apparent in recent months in areas such as Bin Mahmoud, Al Sadd, and Msheireb. High specification buildings that offer tenants swimming pools and gyms have retained high occupancy rates, while older buildings generally see vacancy rates increase, and rental levels falling.

Semi-furnished, two-bedroom apartments in Porto Arabia typically command monthly rents of between QAR 10,000 and QAR 12,000. In districts such as Bin Mahmoud rental values can vary significantly depending on the quality of the buildings. New buildings can command rents between QAR 9,000 and QAR 11,000 per month for two-bedroom apartments, while similarly sized apartments in older buildings may struggle to generate monthly rents of QAR 6,000.

Demand from tenants has shifted towards fully furnished units or serviced apartments over the past year. This is especially the case for new residents on short term contracts – including those moving to Qatar on World Cup-related projects.

Residential investment sales in Qatar have been boosted by the expansion of Freehold Zones, which allow ownership of property by foreign nationals. Residential sales in Qatar increased by 180% in April and May compared to the same months in 2020. Properties in Al Daayen represent approximately one-quarter of all residential sales, indicating the popularity of new freehold sales projects in Fox Hills, Al Erkyah City and Yasmeen City in Lusail.

 

Cushman & Wakefield Quarterly Report Qatar Q2 2021

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