Doha: The housing rent boom that forced long-term residents out of their homes and caused a real estate bubble in Qatar appears to be here to stay as landlords anticipate a rise in operating costs soon.
During a meeting with The Peninsula The average monthly rent in the prime residential leasing market for apartments, according to Faisal Durrani, Partner and Head of Research at Knight Frank Middle East, has increased by 22 percent over the past 12 months to about QR13,100, with three-bedroom apartments at The Pearl commanding the highest lease rates. We believe that this is primarily related to the influx of new foreign workers as COVID-19 restrictions loosen, but also to the actions of landlords who acted to take advantage of any potential hotel room shortage at the end of the previous year. Temporary demand drivers take a few quarters to start fading in any global residential market, and this is probably also true for Doha.
According to Damantha Wilfred, project director for real estate investments, the second quarter of 2022 saw a sharp rise in housing rental prices in Doha as a result of the FIFA World Cup’s high demand, which caused a brief bubble in the market.
Many people in the market, including real estate experts, predicted and expected a decline in rental prices beginning in 2023. But as it stands right now, areas like Lusail Marina, Lusail Fox Hills, The Pearl Qatar, West Bay, Corniche, West Bay Lagoons, etc., are still significantly more expensive than other parts of Doha, where prices have already fallen noticeably.
He continued, “In our professional opinion, Doha rental prices still needs to drop down in the coming second to third quarters of the year making a solid correction to the rental prices making a healthy, stable, and a sustainable environment to both the Landlords and it’s tenants.” He added that there are many residential towers, buildings, and compounds still vacant and on hold waiting to hit the market in the coming months of the year where the supply will be properly matched.
After the World Cup, property experts noticed a sharp increase in the number of people looking for homes, speculating that housing rentals would decline due to the drop in demand for occupancy.
The opposite is actually true, as landlords continue to charge pre-World Cup rents despite utility tax increases.
Real estate experts claim that at the end of last year, when rumors of an increase in rent started to circulate, renters put off looking for apartments. This year, many even experienced a sharp increase in their rent, which forced them to look for new spaces.
The supply and demand of properties as well as changes in borrowing rates continue to influence global real estate prices.
Qatar recorded the highest average monthly rent for two-bedroom apartments in the Middle East, according to the most recent data from Global Property Guide. According to the report, Qatar was at the top of the list with an average monthly rent of $3,742 (QR13,625), followed by the United Arab Emirates with $2,208. (QR8,043).