Rise in rents temporary, expected to subside in 2023, says report

The rental increases witnessed at present in the country is expected to subside in 2023, according to Cityscape Intelligence Report 2022. 

The increase in rents ahead of the FIFA World Cup Qatar 2022 is likely to be ‘temporary’ due to the demand said the report ‘Real estate trends in Qatar: Freehold Zones, work from home solutions, FIFA World Cup to dominate in 2022.’

It said that the commercial market has also seen an increase in activity, particularly in Lusail, however rental levels are still impacted by a general oversupply in the market.

“The residential real estate market has seen a surge in activity in 2022, which can be explained by the additional demand being generated by the World Cup.

We are seeing evidence of rental increases in Qatar for the first time since 2015; however, this increase is likely to be temporary as demand is expected to subside in 2023,” the report said quoting an official at Cushman & Wakefield.

The report discussed about Qatar’s real estate market over the next year and what impact the FIFA World Cup will have on the property sector.

The report also said that it is expected to see further upward pressure in apartment rents as availability become scarcer ahead of Qatar 2022. It said that landlords are increasingly likely to demand 2-year contracts to capitalise on the rental inflation and lessen the impact of reduced demand in 2023. 

It emphasized that Qatar’s real estate market has been dominated in recent years by the upcoming FIFA World Cup, with an unprecedented volume of apartments, hotels, villas, retail malls and office buildings developed between 2010 and 2022.

As a prediction on post-World Cup for the country’s real estate market, the report said that the construction will pause in the second half of 2022 as Qatar prepares for the event; thereafter, a significant slow-down is expected in new project commencements until the supply is absorbed and rental levels increase. 

To recall, Cushman & Wakefield in its recent report on “Qatar Q2 Real Estate Market Review,” said that residential rents increase ahead of the FIFA World Cup Qatar 2022, with the residential real estate sector witnessing strong growth in rents during the second quarter of the year and apartments seeing the highest increases. 

It said that the increase in short-term demands ahead of Qatar 2022 has seen some asking rents increase by more than 30 percent year-on-year. 

The report highlighted that following the growth of 5-7 percent increase in rent in first quarter of 2022, the pace of residential rent increases accelerated in April and May as landlords took advantage of a spike in demand related to the FIFA World Cup Qatar 2022 in November and December.