- Says hapondo’s latest report
Residential demand buoyed Qatar’s property sector in 2023
DOHA – Homegrown property portal, hapondo, today launches Qatar’s Property Report Q4 2023 revealing key insights into the real estate sector’s performance in the quarter and across the previous year.
Residential property transactions have kept Qatar’s real estate sector busy and buoyant in 2023, with a significant part of the year’s trading volume driven by demand for homes. A year after the FIFA World Cup Qatar 2022, Qatar’s residential real estate sector has proven to be resilient amid speculations of a slowdown that is natural after hosting mega-events.
In 2023, transaction volume in real estate reached QAR 16.7 billion, down from QAR 21.2 billion. Meanwhile, mortgage volume decreased by 31% in 2023 to QAR 45.6 billion, according to the Ministry of Justice.
Despite this, investing in apartments remained popular. The Ministry of Justice reported QAR 2.75 billion worth of residential units sold, 82% higher than QAR 1.51 billion in 2022. The average deal size per residential unit transaction rose by 26% from QAR 2.1 million in 2022 to QAR 2.64 million in 2023.
hapondo’s analysis further revealed that approximately 56% of trading volume was done for the intention of villas and houses (for instance, buying land to build a villa), while 18% for residential units. Case in point: Although vacant land comprised 37% of transaction volume in terms of asset type, 82% of said land transactions were intended for villas and houses.
Apartment yields remain healthy at 6.6%
Overall, gross rental yield across Doha’s prime apartment market (West Bay, Lusail, and The Pearl) stood at 6.6% in Q4, a healthy sign for the real estate sector. hapondo believes this still makes Qatar an attractive investment destination within the Gulf region.
Residential highlights:
- Marina District in Lusail recorded 8% in yield for 1BR and 9.2% for a 2BR, while West Bay was at 7.6% (1BR) and 7.9% (2BR).
- Although gross yield in The Pearl stood at 6.4% (1BR) and 6.1% (2BR) before service charges, rents in The Pearl remained relatively stable and demand for rental is strong.
- The Pearl is the most sought-after location for apartment seekers, followed by West Bay, and Fereej Bin Mahmoud.
- Fox Hills in Lusail saw downward pressure on average apartment rents in Q4. For apartment tenants, this means greater leverage to seek bargains in Lusail.
- Al Waab, Al Gharrafa, and Al Markhiya were the most popular locations for villa rental searches on hapondo in Q4
- Al Thumama, Al Waab, Al Gharrafa, and Ain Khaled saw lower median rents in Q4, while median rents in Al Mamoura, Al Hilal, and Old Airport have become more expensive
In terms of apartments for sale, median prices across Doha’s prime market remained stable for the one-bedroom category. There were more affordable options listed in the market for studio apartments in The Pearl and Lusail.
Hotels vs apartments
Hotels continued to reach out for more long-stay guests through better rates in the 1BR category. hapondo’s analysis shows an already narrow difference between the median rent of 1BR apartments and hotels in areas such as Al Sadd (13.3%) and Al Mansoura (7.1%). In fact, several hotel apartment options in Salata, Umm Ghuwailina, and Old Airport were already more affordable than regular apartments in Q4.
Although the premium between hotels and apartments widens in the 2BR category, hapondo expects that hotels in non-leisure areas (such as within the city) will continue to seek out the apartment tenant market to increase their occupancy rates in 2024.
Commercial real estate rents
Tenants who were looking for an office in Q4 would have still seen a wide basket of options, from unfitted spaces to business centers.
The difference between a fully fitted office and unfitted space in West Bay (346%) almost equaled that of Al Sadd (343%), revealing the high premium to pay for a plug-and-play office.
Meanwhile, the difference between unfitted and semi-fitted was significantly slim in office spaces in Lusail and West Bay, suggesting pressure on rents brought by competition.
The performance of retail in Lusail has been much more promising, where Fox Hills saw a 4.2% increase in average lease rates outside malls. A new retail space, Velero Mall, opened in Lusail late last year.
Outlook
hapondo predicts that the future of real estate in Qatar will be shaped both by local policy and regional dynamics. With the release of the National Development Strategy 3, hapondo encourages investors to consider the real estate sectors directly supporting or affected by the industries identified on NDS3.
hapondo further outlines regional dynamics and trends in the form of transportation, infrastructure, and tourism that will shape Qatar’s property sector. With Saudi Arabia and the UAE ramping up their programs to attract talent, businesses, and investments, the Gulf region may likely see much more competition for attention in real estate.
-Ends-
Download the report through www.hapondo.qa. For press inquiries, contact paolo@hapondo.qa
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© Press Release 2024
