Residential rents soar ahead of 2022 World Cup
Doha: Residential rents soar ahead of the FIFA World Cup Qatar 2022, with the residential real estate sector witnessing strong growth in rents during the second quarter (Q2) of the year and apartments seeing the highest increases, Cushman & Wakefield has said in its “Qatar Q2 Real Estate Market Review”.
The report added that a spike in short-term demands ahead of FIFA World Cup has seen some asking rents increase by more than 30 percent year-on-year.
Following growth of 5-7 percent in Q1, the pace of residential rent increases accelerated in April and May as landlords took advantage of a spike in demand related to the FIFA World Cup in November and December, the report said.
By June, Cushman and Wakefield estimate that apartment rents had, on average, increased by over 30 percent on the same time last year.
Rental increases are being driven by demand for accommodation ahead of the World Cup, with tens of thousands of apartments being reserved both for fans and staff accommodation for companies providing World Cup-related services.
The impact of rental increases has been most evident in the apartment sector rents in prime districts. Typical two-bedroom, semi-furnished apartments in Porto Arabia, which had been available for QR10,000 – QR12,000 in 2021 are now leasing for QR13,000 – QR15,000.
In central districts such as Bin Mahmoud, apartment rents have typically increased by between QR2,000 and QR3,000 since 2021, reflecting an increase of more than 30 percent in some cases, the report said.
It added that villa compounds have also seen an increase in rents over recent months; however, as many of these properties already benefitted from high occupancy and long term tenants, rental increases have been more modest than in apartment buildings. Uplifts of between 3 percent and 10 percent have been common in recent lease renewals.
“The surge in rent is based on a short-term World Cup-related spike in demand, with rents expected to fall again in 2023 as demand subsides and available properties return to the market. This has led to an increasing trend in landlords insisting on two-year leases for apartments over recent months. There is also an increasing trend in tenants not having their leases renewed on request, as some landlords look to vacate their properties and capitalise on inflated World Cup rents,” said Cushman and Wakefield.
The supply of residential accommodation for fans visiting Qatar for the World Cup in November has been the focus of significant attention in 2022. In May, Barwa confirmed a 6 month lease on the new Barahat Al Janoub affordable housing scheme, to provide one of the largest concentrations of fan housing for the World Cup – with almost 17,000 rooms available.
According to statistics released by the Planning and Statistics Authority, the number of residential sales transactions fell by 19 percent over the first five months of the year compared to the corresponding period last year. This followed a year-on-year fall of 30 percent in December. The report noted that 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.
Source: The Peninsula