Qatar is expected to see further downward pressure on residential rents as new demand fails due to Covid-19 measures to prevent the spread of the pandemic, according to Cushman and Wakefield Qatar (CWQ).
Measures taken to stop the spread of Covid-19, including a restriction on entry into Qatar, has "stifled" new demand for residential property, CWQ said in its latest report.
Activities in the residential lettings market has almost exclusively been limited to those re-locating within the country throughout the third quarter (Q3), it said.
Qatar maintains a cautious approach in opening its borders, it said, highlighting that travel into Qatar remains tightly controlled and is subject to both entry permits and compulsory quarantining for a minimum of seven days.
Finding that Qatar has adopted a cautious approach in the re-opening of its borders to non-residents; it said despite these measures, the mobility indices are trending up in September after stalling in August.
The average now stands at over 98% of pre-crisis levels, having slipped to 57.3% in August, the report said.
The third and fourth phases of the lifting of restrictions took place at the end of July and on September 1 respectively. These phases saw a re-opening of workplaces — with safety measures in place — and schools, which have welcomed students back on a rotation basis to restrict numbers in classrooms.
The Covid-related lockdown measures and the associated fall in global oil prices has resulted in both private and public sector cutbacks, which started to filter through to residential occupancy rates in Q3, according to CWQ.
Highlighting that increasing vacancy rates has increased the flexibility of terms on offer to new tenants; it said shorter-terms, including six-month leases, are now being offered by some landlords to secure tenants in an increasingly competitive market.
As supply increases, so too do tenants’ options, it said, adding in recent months there has been a trend in tenants looking for managed apartment buildings rather than individually owned units, due to the availability of on-site management and maintenance.
"The share of tenants looking for furnished, rather than semi-furnished apartments has also been increasing in recent months," it added.
Following a period of relative stability, there have been signs of a fall in headline rents in recent months. Monthly rents for two-bedroom apartments on the Pearl-Qatar are now typically between QR9,500 and QR12,000, while rents for two-bedroom units in Al Sadd typically range from QR5,000 to QR6,500.
The apartment rents increasingly include the payment of utility bills, reducing the net effective rent for those properties.
"As supply increases, we expect to see further downward pressure on residential rents. This trend will be interrupted temporarily in 2022 by a sharp rise in demand due to the hosting of the 2022 FIFA World Cup," CWQ said.
According to the Planning and Statistics Authority, the number of residential house sales increased by 61% over the first seven months of the year compared to the same period last year. The figures for July and August reflected a 138% increase.
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