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The real estate market in Qatar experienced a significant surge in demand during the fourth quarter of 2022 due to the FIFA World Cup hosted in November and December. A report published by Cushman and Wakefield states that Qatar's residential real estate market experienced unprecedented market dynamics in 2022 due to the requirement for housing units to accommodate visitors during the tournament.
The report also mentioned that apartments across the country experienced a significant increase of 15 to 30 percent in annual rental contracts, which have not declined post-World Cup. The compound villa sector has been taking advantage of high occupancy rates for several years, and rents have skyrocketed by 3 to 8 percent during the first three quarters of 2022. However, an increasing number of apartments and villas became available to residents by October, which eased the upward pressure on rents.
Many villas and apartments in the country have unchanged rents in 2023, even though the rents were expected to decline after the World Cup. Luxurious one-bedroom semi-furnished apartments at The Pearl Qatar were leasing out between QR11,000 ($3,021) and QR12,000 ($3,295), while two-bedroom apartments were being rented between QR14,000 ($3,845) and QR15,500 ($4,257). Rental apartments in Lusail City witnessed a leasing range of QR8,000 ($2,197) to QR10,000 ($2,746) per month.
According to the report, nearly 35,000 residential units were built-in for the football tournament, and many of these units are held on government 'Eskan' leases of up to five years with rolling break options. The supply of residential units is expected to increase rapidly with newer projects and developments taking place in key cities such as Al Wakrah and Lusail in the years ahead. The report elucidates that the rental prices will come down, and residential rents are expected to start falling in 2023.
Recent data from the Planning and Statistics Authority (PSA) showed that the number of residential sales transactions fell by 25.5 percent in 2022 compared to 2021. The PSA's statistics indicate that the pace of residential property sales has slowed since an initial surge in activity following the introduction of Law No.16 of 2018, which saw non-Qataris take advantage of the changes to ownership laws in areas such as Lusail.
The report highlighted that the Q4 figures reflected a 16 percent year-on-year fall, but there has been an overall increase in transaction value of 16.6 percent, indicating an increase in the number of higher-value residential properties being transacted in recent months. The report concluded that residential rents are likely to start falling in the second or third quarters of 2023 before any significant falls from 2022 levels become evident.
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