Gap emerges between residential rents in new and old towers in Qatar: CWQ

The early months of 2024 have seen evidence of a gap emerging between residential rental levels in new towers, and towers that were completed more than 10 years ago, according to Cushman and Wakefield Qatar (CWQ).

Many tenants are focused on new, modern, well-managed buildings where rents are inclusive of utility bills and furniture. This has led to discounted rents in many older buildings, particularly for apartments owned by private investors, CWQ said in its report.

Residential rents in Qatar have stabilised to a large degree after a period of fluctuation both ahead of, and after the FIFA World Cup, it said, adding occupancy rates in prime apartment buildings and villa compounds have climbed over recent months with strong demand witnessed for most new buildings in Lusail and The Pearl Island.

While new developments continue to reach the market, it said an increase in new residents to Qatar has ensured that occupancy rates have remained stable.

New types of real estate product continue to launch in master-planned neighbourhoods in Doha, Lusail and Al Wakra, the report said.

Apartment buildings in Giardino Village on the Pearl Island offer tenants high quality apartments at more affordable rents than are typically available in Porto Arabia or Viva Bahriya. The Al Janoub Gardens project, which provides almost 2,400 new apartment units, is now competing with projects such as Ezdan Oasis and Madinatna at the more affordable end of the market, ensuring that rents should remain stable, according to CWQ.

Finding that occupancy rates remain high in most villa compounds around Qatar, it said "we are starting to see upward pressure on rents in some of Doha’s more popular compounds in recent months."

While rents have generally remained stable so far this year, some landlords no longer offer the rental incentives to new tenants that had been commonplace, it added.

According to the latest statistics released by the National Planning Council, the number of residential sales transactions fell by 16.2% year-on-year in 2023. This trend reversed in January and February 2024, with the number of residential sales up by 30% on the corresponding months last year, reflecting an increase in transaction value of 46%.

The sales market has been dominated by owner occupiers rather than investors in recent months, it said, adding typically, apartment sales are being driven by residents looking to secure residential permits and avoid paying rent.

Purchasers are being encouraged by the increasing flexibility of structured payment plans for new off-plan sales being offered by many developers in Lusail’s various residential districts.