Quarterly Report Qatar Q4 2020: Residential Market Overview
New real estate ownership laws boost demand for apartments in Lusail
Recent amendments to real estate ownership laws allowing non-Qataris to purchase real estate in 10 zones have significantly boosted the residential sales market in recent months. This has been most notable in Lusail where apartments in the Al Erkyah and Yasmeen districts have seen an increasing volume of sales.
Demand for real estate sales has been boosted by expatriate purchasers, who can take advantage of the new ownership laws. The laws provide owners with the permanent residency card privileges for property investment above QAR 3,650,000 and the benefit of a residency permit without a sponsor for those spending more than QAR 730,000.
The release of apartments in Lusail for prices between QAR800,000 and QAR 1,800,000 are typically available with flexible payment plans, providing an opportunity to invest in property that had not been available to the same degree before 2019.
According to the Planning and Statistics Authority, there was a 25% increase in residential sales transactions in October and November 2020 compared to the same months in 2019.
The COVID-19 related restrictions to international travel have stifled recruitment in Qatar, resulting in a drop in new demand for residential rental properties in 2020. The increasing supply, and the interruption in demand, has seen rents stagnate in recent months. The increase in affordability over recent years has helped to drive leasing activity as residents increasingly look to upgrade their accommodation.
Monthly rents for two-bedroom apartments on the Pearl-Qatar are now typically between QAR 9,500 and QAR 12,000, while rents for two-bedroom units in Al Sadd typically range from QAR 5,000 to QAR 6,500. Rents for two-bedroom apartments in Fox Hills, Lusail now range from QAR 6,000 to QAR 7,500 per month.
The increase in new supply has resulted in additional choice for tenants. Professionally managed apartment buildings with onsite facilities management are usually favoured ahead of individually owned units.
Qatar’s residential real estate market will be influenced by hosting the FIFA World Cup in 2022. The Supreme Committee for Delivery and Legacy is expected to lease thousands of apartments on Eskan leases of between one and five years from late 2021. The absorption of these apartments is likely to offset the increasing supply and support rental levels in the short to medium-term.
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