In the first half of the year, Doha rental rates saw a significant decline due to the reopening of apartments after the World Cup. However, as Cushman and Wakefield noted during a seminar yesterday, in their Q4, 2023 Real Estate Market Review, residential rents have stabilized in recent months.
Wakefield & Cushman The real estate seminar, which was hosted by Qatar and RICS, covered the performance of the Qatari real estate market in 2023 as well as forecasts for 2024 and beyond, based on current market trends and analysis.
The welcome speech was given by Edd Brookes, General Manager of Cushman and Wakefield Qatar and Head of Middle East. To draw in investment in the upcoming years, Mairead Hughes of the RICS emphasized the significance of Qatar’s real estate market implementing best practice international standards.
Addressing the event, Johnny Archer, Head of Consulting and Research at Cushman and Wakefield said, “As Qatar’s real estate market adjusts and matures following years of strong growth ahead of World Cup, receiving advice from real estate professionals has never been more important. The recent introduction of a new regulatory body is an important step for Qatar. A transparent and well-regulated market is imperative in attracting real estate investment”.
“Rents may soften in certain sectors of the apartment market in 2024 as new supply comes to the market,” he added.
According to a real estate consulting firm’s report on the residential market overview, there has been a significant demand for apartments in newly built, higher-specified buildings as annual leases come to an end and new residents move into Qatar. Due to this demand, many recently constructed buildings in desirable areas frequently see 100% occupancy in just three months.
There has been an apparent tendency among the premium end of the market’s tenants to move from older towers in the Pearl to new construction. Because of this, the occupancy rates of different buildings vary depending on their age and quality.
The Q4 report also noted that modern apartments in Fox Hills and Erkiyah City in Lusail, which are frequently offered at comparable rental prices, are becoming more and more appealing to residents of some of Doha’s older suburbs.
Additionally, it stated that although the occupancy rates of new apartment buildings are generally lower than those of older buildings, villa compounds throughout Doha have generally high occupancy rates, and rents will grow incrementally starting in 2023.
According to data from Cushman and Wakefield, the number of apartments and villas available in Doha is expected to surpass 400,000 units by 2024, representing a compound annual growth rate of 6.2 percent over the previous ten years.
“We expect the pace of new construction to slow somewhat in the coming years, with the largest amount of new housing concentrated in the various master-planned districts of Lusail.
Apartments are commonly marketed with one-month rent-free. Furnished apartments typically command a premium of between QR500 and QR1,500 per month depending on the number of bedrooms. There is an increasing range of rents on Pearl Island, due to the addition of new supply in Floresta Gardens and Giardino Village, while landlords of many older properties have reduced asking rents to attract tenants,” the report said
It added, “In Fox Hills, one-bedroom furnished apartments are now typically available for between QR5,000 and QR6,500 per month, with three-bedroom units now commanding between QR9,000 and QR11,000 per month.”
October and November saw a 16.2% YoY increase in residential sales transactions, which may have been caused by a slowdown in business during the FIFA World Cup. PSA statistics show that from 2023 to November, overall sales transactions decreased by 17.7%.