Quarterly Report Qatar Q4 2022: Residential Market Overview
Residential rents plateaued in Q4 following strong increases throughout the year.
Qatar’s residential real estate experienced unprecedented market dynamics in 2022, due to the hosting of the FIFA World Cup and the substantial but temporary requirement for housing units to accommodate visitors during the months of November and December.
The spike in demand for residential properties, used to supplement hotel accommodation, saw a sharp increase in rental rates throughout 2022 as availability became increasingly scarce.
Apartment rents in Qatar typically increased by between 15% and 30% for annual lease terms, with many landlords also insisting on two-year terms to secure these higher rents for an extended period. The compound villa market, which has been benefitting from high occupancy rates for a number of years, saw rents generally increase by 3% – 8% in the first three quarters of the year.
By October, with the accommodation requirements of tourists largely catered for, an increasing number of apartments and villas were made available to residents once again, which saw the upward pressure on rents ease.
By Q4 typical one-bedroom semi-furnished apartments of the Pearl-Qatar were leasing for QAR 11,000 to QAR 12,000 with two-bedroom, units generally commanding QAR 14,000 to QAR 15,500 per month. In Lusail, two-bedroom apartments in Fox Hills were available for QAR 8,000 to QAR 10,000 per month.
Cushman & Wakefield estimate that approximately 35,000 residential units were used as ‘fan accommodation’ in Q4. Many of these units are held on government ‘Eskan’ leases of up to 5 years with rolling break options. This supply, together with new projects under development in areas such as Al Wakra and Lusail will add significant new supply to the market in the coming years, which is likely to result in rents falling across the residential sector.
Residential rents are expected to start falling in 2023; however, it is likely to be in the second or third quarters of the year before any significant falls from 2022 levels become evident.
According to the latest statistics released by the Planning and Statistics Authority, the number of residential sales transactions fell by 25.5% in 2022 compared to 2021. 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. Q4 figures reflected a 16% year-on-year fall; however, an overall increase in transaction value of 16.6% indicates that there has been an increase in the number of higher-value residential properties being transacted in recent months.
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