Increasing affordability of premium apartments in Qatar has pushed the demand for such units in West Bay, The Pearl-Qatar and Lusail, according to a real estate report released on Sunday.
“The average rental reduction of more than 20 percent over the past three years has increased the affordability of many prime locations, with increased demand for West Bay and The Pearl-Qatar being driven by residents looking to trade-up,” real estate research firm DTZ’s Director for Consulting and Research in Qatar Johnny Archer wrote in the report.
“As supply increases, so does the range of options available to residents in all income brackets,” he said.
The lower rents that are now on offer are also being supplemented by rental incentives, such as rent-free periods or the inclusion of utility bills within quoted rents, the report, which gives an overview of the first quarter real estate trends in Qatar, said.
“While residential rents have typically fallen by 5 to 8 percent over the past 12 months, a lack of available three-bedroom units in Porto Arabia has seen rents for these units increase, bucking the general trend,” the report said.
“The large increase in the number of one-bedroom units being delivered to the market in new and upcoming developments (in comparison with two and three-bedroom units) is likely to see greater downward rental pressure on these units in the coming year,” it added.
Occupancy rates in villa compounds have also been recovering throughout Doha, particularly in some of the more sought-after developments, according to the report. This has resulted in rental levels stabilising after a period of decline between 2016 and 2018, it added.
Highlighting the factors that increased demand in the domestic residential market, the report said the potential market for residential sales has been expanded by Law No. 16 of 2018, which was implemented in March of 2019, as the number of ‘freehold’ zones in Qatar has been increased from three to 10.
Citing the Planning and Statistics Authority, the report said both the overall number of residential sales and the total value of transactions in Qatar in January and February increased by 40 percent and 32 percent respectively, compared to the corresponding months last year.
However, it added, the average price per transaction has decreased by 6 percent as purchasers take advantage of a softening market.
Several new residential towers have recently been completed in Viva Bahriya, with a significant number of additional buildings in Abraj Quartier, the Marina District and Viva Bahriya expected to complete within the next 12 to 18 months, DTZ said.
In its office market overview, the report said the demand is yet to catch up with the new supply of office accommodation coming online in the Marina District of Lusail. Relocations are more likely to happen as corporate occupiers seek to upgrade, it added.
Supply in the hospitality sector, the report said, has surpassed 26,000 keys, with five-star accommodation accounting for 56 percent of total available keys.
“By 2022, an additional 23,000 hotel rooms and hotel apartments are expected to come online, with 117 entities currently at various stages of planning and construction,” it added.
The report attributed increased supply in the retail real estate market to higher vacancy rates.
“Rental and capital incentives are being offered to prospective tenants as landlords compete for retail occupiers – a sign of an oversupplied retail market in a climate of reduced retail spending,” it said.
© Copyright Qatar Tribune. All Rights Reserved.