Quarterly Report Qatar Q4 2023: Residential Market Overview

New apartment buildings attract strong demand from residents looking to upgrade

Following the release of apartments back to the market post-World Cup there was a significant downward correction in rental rates in Doha during the first half of the year; however, residential rents have stabilized over recent months.

As annual leases expire and new residents arrive in Qatar, there has been strong demand for apartments in newly constructed buildings of higher specification. This demand means that many new buildings in good locations often reach full occupancy within three months.

At the premium end of the market, there has been a noticeable trend in tenants relocating from older towers in the Pearl, to new buildings. This has led to a disparity in occupancy rates between buildings based on their age and quality.

Similarly, residents in some of Doha’s older suburbs are increasingly looking to relocate to modern apartments in Lusail’s Fox Hills and Erkiyah City – which are often available at similar rental levels.

While there is an increasing gap in occupancy rates between new apartment buildings and older buildings, occupancy rates are generally high in villa compounds across Doha, with incremental growth in rents during 2023.

Cushman and Wakefield statistics indicate that the supply of apartments and villas in Doha has grown to more than 400,000 units by 2024 – a compound annual growth rate in supply of 6.2% over the past decade. 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 QAR 500 and QAR 1,500 per month depending on the number of bedrooms. There is an increasing range of rents on the 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.

In Fox Hills, one-bedroom furnished apartments are now typically available for between QAR 5,000 and QAR 6,500 per month, with three-bedroom units now commanding between QAR 9,000 and QAR 11,000 per month.

PSA statistics indicate that the number of residential sales transactions increased by 16.2% in October and November (YoY), possibly reflecting a slowdown in activity during the FIFA World Cup. Overall sales transactions in 2023 to November fell by 17.7%

The introduction of a Real Estate Regulatory Authority in 2023, coupled with updated mortgage lending regulations should provide a framework for increased investment in the real estate sector in Qatar over the coming years. The launch of the MME’s online property portal in November, which records lease and sales activity, should provide an unprecedented level of transparency to increase investor confidence.