Residential rents in Doha expected to fall in H2 on Covid-19 impact: Cushman and Wakefield Qatar
Residential rents in Doha are expected to fall in the second half (H2) of this year and in 2021 as Covid-19 is likely to have its impact in the short term, according to Cushman and Wakefield Qatar (CWQ).
“The Covid-19 is likely to impact on overall demand in the short term due to lower job growth and the second quarter (Q2) redundancy measures,” CWQ director, head of Consulting and Research, Johnny Archer said yesterday at a webinar titled ‘Qatar Real Estate Market Overview Q2 2020’.
The rental levels remained relatively stable although further downward pressure are expected in H2 and 2021, he said.
While temporary rent reliefs have been available in some developments, headline rents have remained “relatively stable” in recent months, despite the turbulent market conditions, the report said.
“As supply increases, we expect to see downward pressure on rent, especially in secondary locations; however, this is likely to be tempered by a sharp rise in demand in 2022 with the hosting of the 2022 FIFA World Cup,” it said.
While the recent cutbacks are based on tackling the immediate impact of the Covid-19, a V-shaped recovery is unlikely in the residential real estate market, according to CWQ.
The restoration of the wider economy and the associated job market performance will drive new demand, it said, adding at the same time, a general caution about global travel may delay any immediate bounce in expatriate job numbers.
The report found that occupancy rates in Q2 have generally remained “stable or increased” in prime districts, such as The Pearl-Qatar, as an increase in affordability has seen a general trend in people upgrading to these locations.
Areas such as Fereej Bin Mahmoud, Al Mansoura, and Umm Ghuwailina have all seen vacancy rates increase in recent months, it said, expecting vacancy in some villa compounds to rise temporarily in the third quarter as the results of the Covid-19 cutbacks come into effect.
New residential supply in Q2 has included Paramount Tower (Porto Arabia Tower 12) and 12 Viva Bahriya on The Pearl Qatar. In Lusail, Les Maisons Blanches, a compound of villas and apartments next to Place Vendome, started leasing in May. Supply in Lusail’s Marina district has now surpassed 1,500 units.
Several new developments have delayed opening in recent months due to the Covid-19 pandemic; however, significant new supply will reach the market before the end of the year, it said, highlighting that Abraj Bay, on The Pearl-Qatar, comprises almost 1,500 residential units in four towers and associated townhouses and adds substantial residential supply in the district.