Press Releases

July 22, 2020

Quarterly Report Qatar Q2 2020: Residential Market Overview

The residential sector is still active despite COVID-19 restrictions

Based on statistics released by the Planning and Statistics Authority, the overall number and value of residential sales in April and May fell by approximately 61% on the equivalent period last year, while the average deal value only dropped by 2%. While official figures for June have not been released, Ministry of Justice (MoJ) statistics indicate that a sharp increase in transactions has been registered.

The COVID-19 lockdown measures have resulted in government cutbacks in Qatar, which have included redundancies throughout the public sector in Q2. These measures are likely to result in an increase in residential vacancy rates in the short term.

While the recent cutbacks are based on tackling the immediate impact of the COVID-19 epidemic, a V-shaped recovery is unlikely in the residential real estate market. The restoration of the wider economy and the associated job market performance will drive new demand. At the same time, a general caution about global travel may delay any immediate bounce in expatriate job numbers.

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. We expect vacancy in some villa compounds to rise temporarily in Q3 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.

A number of 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. 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.

While temporary rent reliefs have been available in some developments, headline rents have remained relatively stable in recent months, despite the turbulent market conditions. 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.

Cushman & Wakefield Quarterly Report Qatar Q2 2020

 

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