Quarterly Report Qatar Q3 2022: Residential Market Overview
Residential rents continue to increase as available accommodation is at a premium
The residential real estate market in Qatar has been distorted in recent months by the unique challenges placed on the country in accommodating more than one million visitors ahead of the World Cup.
Cushman & Wakefield estimate that more than 30,000 residential units have been held back from the market in recent months to meet the potential demand from visitors in November and December.
The spike in demand, and restrictions in supply has seen rents in Qatar increase by more than 30% for long terms leases; however, recent evidence indicates that the upward pressure on rental levels may be easing. The Supreme Committee for Delivery and Legacy are expected to hand back properties that will not be required by them for the tournament, while there are signs that some landlords have not secured the short-term deals for the World Cup and may make their properties available once again to residents for annual agreements.
Many landlords continue to demand two-year lease terms to prolong the benefits of current rental levels. Typical two bedroom, semi-furnished apartments in Porto Arabia, are currently leasing for QAR 13,000 to QAR 15,000 per month, while this is expected to fall again in 2023, when supply increases and demand eases.
The market for compound villas has not been impacted to the same degree as apartments. Residential compounds have enjoyed high occupancy rates for an extended period and are largely occupied by long term residents. Rental uplifts of between 3% and 10% have been common in 2022, and we don’t expect a fall in rents in 2023, as will be the case in the apartment market.
Throughout Q3, property purchasers and renters have increasingly been employing a wait-and-see approach, given the uncertainty for future pricing and the restrictions placed on market activity by the limited availability.
According to statistics released by the Planning and Statistics Authority, the number of residential sales transactions fell by 26% over the first eight months of the year compared to the corresponding period last year. These statistics indicate that the pace of residential property sales has slowed since an initial surge in activity following the introduction of Law No.16 of 2018, which saw non-Qataris take advantage of the changes to ownership laws in areas such as Lusail. The recent downturn in activity also suggests that many prospective purchasers are employing a ‘wait and see approach’ until after the World Cup.