Quarterly Report Qatar Q3 2023: Residential Market Overview
Increased demand for apartments in Lusail over recent months
After a fall in apartment rental rates throughout Qatar in Q2, some sectors have stabilized, with an increase in demand over recent months. Reduced rent, coupled with rent-free incentives saw an increase in demand for apartments in The Pearl Qatar and Lusail in August and September, which coincided with the beginning of the school year.
With an increase in supply, there is an increasing disparity between occupancy rates within the market. High-specification buildings with good-quality property management are starting to enjoy high demand from prospective tenants, despite evidence of higher vacancy rates throughout the market.
Some of the new master-planned apartment developments such as Madinatna and Ezdan Oasis – which benefitted from strong World Cup related demand – have been building occupancy again throughout 2023, with attractive rental deals on offer to new tenants.
Compound villas continue to benefit from high occupancy throughout Doha, with rents remaining relatively stable throughout 2023.
One-bedroom apartments in The Pearl Island can usually be leased for between QAR 7,000 and QAR 9,500 per month, depending on the location and quality of the building. Most three-bedroom units on the Island are now available for between QAR 13,500 and QAR 16,500 per month.
In Fox Hills, one-bedroom apartments are now typically available for between QAR 5,000 and QAR 6,500 per month, with three-bedroom units now commanding between QAR 8,500 and QAR 10,000 per month.
According to statistics released by the Planning and Statistics Office, residential sales transactions fell by 3.1% in July and August compared to the same months last year. Overall year-to-date sales transactions have fallen by 24.5% in 2023.
Sales activity has reduced following a surge in activity in 2020, which was triggered by the enactment of Law No. 16 of 2018. This law allowed non-Qatari investors to purchase in Lusail and benefit from residency permits that were granted to purchasers.
Structures are being put in place in 2023 to develop the real estate investment sales market in Qatar in the coming years. The introduction of a Real Estate Regulatory Authority will increase transparency in the market and enhance statutory and legal protections for investors. Furthermore, Qatar Central Bank has announced a series of amendments to its real estate financing (mortgage) regulations, which is expected to boost the residential sales sector by redefining the loan-to-value rates and increasing maximum mortgage terms for Qatari nationals and expatriates.
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