Market Trends of Qatar Luxury Residential Real Estate Industry
Increasing Supply of Luxury Residential Units in Qatar
There has been rapid growth in the number of towers, malls, gated communities, and luxury villas in the market. In June 2021, towers 6 and 7 were opened in the Viva Bahriya district. Moreover, towers 13 and 14 (Viva Bahriya) and tower 21 (Porto Arabia) were expected to open in 2022. Around 1,700 apartments and villas were added in Q2 2021, bringing the total stock to 294,700 units by the end of the quarter. The supply of apartments comprised 1,500 units from the delivered projects in The Pearl, Lusail, Fereej Bin Mahmoud, Old Ghanim, Fereej Abdul Aziz, Musheireb, and Al Dafna. In addition, the completion of villas and compounds in Al Kheesa, Al Wajba, Umm Salal Ali, and The Pearl added 200 new properties to the existing stock.
In Abraj Quartier, five luxurious residential towers are about to complete delivering more than 2,000 units in total. Homebuyers are also attracted to Lusail’s Marina District, as it plans to open the first tower, which may, in turn, favor the growth of the market in the coming years. In addition, in 2023, Gewan Island - a brand-new mixed-use development – is planned to open, which is located next to Pearl-Qatar Island. Once completed, the island will accommodate a total of 3,500 residents, welcome an additional 3,500 more daily visitors, and have a total of 657 residential units. This property offers its residents a high-end luxury style of living in Doha. This growth in the number of luxury properties in the country is indicative of the continuous growth of the market studied.
Residential Villa Rents have Stabilized in Qatar
Qatar’s rental market witnessed growth because of the hosting FIFA World Cup in 2022, which resulted in a temporary shortage of available accommodation in Qatar, leading the rents to spike throughout the market. Early 2023, experienced a slow return of rental rates to the market conditions of 2020 and 2021, with a significant increase in the number of apartments available to lease. In addition, apartment rentals started to return to normal along with incentives such as one-month rent-free periods. In 2022, the median monthly asking rent for villas was USD 2,857, down 1.2% quarter on quarter and 3.9% year on year. Rents for three-bedroom villas dropped the most in the quarter, by up to 2.8%. Rentals in Al Aziziya and Ain Khaled compounds fell by an estimated 3.3% from one quarter to the next. One, two, and three-bedroom apartments at The Pearl had average monthly asking rents of USD 2,117, USD 3,278, and USD 4,098, respectively.
The demand for villa rentals in Qatar remains high, although prices have come down because of the influx of new units. Prices in Abu Hamour and Ain Khaled and Al Thumama declined, while prices in regions like Al Messila and Al Soudan, where contemporary luxury units are available have risen. In places like Al Muntazah, Al Wakair, and Al Muraikh, landlords and owners are offering 'grace periods' and 'free months' incentives, which could be the reason for price stagnation. A rent-free period of up to 3 months was common in Al Wakrah, Lusail, and Doha in the areas of Al Sadd, The Pearl, Mushiereb, New Doha, etc. The rental level in Lusail is expected to increase over the next 12 months as more residents relocate to the new city and additional amenities are being delivered.
