DTZ Quarterly Report Qatar Q2 2018: Residential Market Overview - Apartments and Villas For Rent In Qatar - DTZ

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August 16, 2018

DTZ Quarterly Report Qatar Q2 2018: Residential Market Overview

The recent softening in residential rents has continued in Q2, as landlords look to maintain or increase occupancy within their buildings. A recent analysis of apartment and villa rents in various districts throughout Doha shows a decrease in headline rents in excess of 10% for available properties over the past 12 months.

Asking rents for vacant apartments in West Bay and the Pearl Qatar have typically dropped by 10% – 15% over the past 12 months, with rent free incentives of one to two months now commonplace. The recent correction in rental values restores value to the market, following unsustainable rental increases between 2011 and 2015.

Recent activity in the rental market has been largely dominated by residents moving between properties in order to take advantage of lower rents and the rental incentives on offer for vacant units. The relative slowdown in population growth has seen less demand from new residents, leading to a slight increase in vacancy rates as new buildings are released.

The fall in rents throughout the market has resulted in an increase in demand for apartments in areas such as West Bay and the Pearl Qatar, as rents have become more affordable, especially to residents whose ‘living allowances’ can now stretch further.
Reduced rents in central Doha districts such as Najma, Mansoura and Muntaza has also resulted in an increase in demand from residents looking to move from more peripheral locations such as Al Wakra, where lower rents had been available in recent years.

As development projects complete and the FIFA 2022 World Cup approaches, DTZ expects there to be an increase in demand for ‘affordable’ residential property due to the expected growth of the service sector. Developments such as Ezdan Oasis in Al Wakra and Mesaimeer City now provide high quality accommodation at lower rents and are well placed to meet this demand. Rental levels of QAR4,500 for a one-bedroom apartment up to QAR6,500 for a three-bedroom apartment, are currently being sought in Ezdan Oasis, which is likely to set the tone for mid-market rental levels.

Recent months have witnessed an increase in residential sales in Qatar, although activity has fluctuated on a month by month basis. Overall residential sales transactions in April and May were up 19.6% on the same months in 2017; however, the overall value of these transactions fell by 11%, reflecting a downward trend in real estate values.

New apartments in the Pearl Qatar are currently available for between QAR12,000 and QAR16,000 per square metre, depending on size and apartment type, while in the ‘second hand market’ recent transactions have typically reflected prices of between QAR9,000 and QAR11,000 per sq m.

 

DTZ Quarterly Report Qatar 2018

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