Inflated housing rents expect to decrease in 2023, report states
With the FIFA World Cup Qatar 2022TM ready to begin in the upcoming months, Qatar is witnessing an imminent rise in rents which can prove to be challenging. The recent spike in demand ahead of the World Cup 2022 is expected to recede next year, according to Cityscape Intelligence Report 2022.
The country is hosting the biggest football tournaments and is expecting to attract approximately 1.2 million spectators from across the globe who wish to seek accommodation. Expected to rise by 40% year on year, the short-term elevation is leveraged by Qatari property owners to their advantage. The number of accommodations available is limited and with the sudden sweep in process, finding a safe and comfortable lodging is becoming more of an arduous task. The sudden demand for rental spaces could very well be the reason of this cost uprising but is expected to be temporary as per the report ‘Real estate trends in Qatar: Freehold Zones, work from home solutions, FIFA World Cup to dominate in 2022.’
Impacted by a general oversupply, the commercial market in Lusail has notably witnessed a raise in rental levels.
“We are seeing evidence of rental increases in Qatar for the first time since 2015; however, this increase is likely to be temporary as demand is expected to subside in 2023,” the report said quoting an official at Cushman & Wakefield. Moreover, the report further examined Qatar's housing market throughout the following year and what influence will the World Cup have on the property sector. It also mentions the normality of seeing a surge in apartment rents as their availability becomes more scarce ahead of the FIFA World Cup Qatar 2022TM.
With housing rents expected to fall by 2023, landlords are progressively prone to insist upon 2-year agreements to capitalize on the inflated rental inflation and lessen the effect of decreased demand in 2023. An exceptional volume of apartments, hotels, villas, retail malls, and office buildings developed between 2010 and 2022 as a result of the forthcoming tournament. The construction of all these newly-built properties is predicted to halt in the second half of 2022 as Qatar would need to go through development programs and preparations for the event. From there on, significant dwindling is expected in the commencements of new projects until the supply is consumed and rental levels increase.
In its recent report “Qatar Q2 Real Estate Market Review,” Cushman & Wakefield mentions that the residential real estate sector observed solid growth in rents during the second quarter of the year with apartments seeing the most elevated increments.
Apartment rent in the Gulf state has notably accelerated by more than 30% compared to a year ago as well. Following the 5% to 7% climb in rents observed in the first quarter of 2022, the pace escalated particularly in April and May as landlords most probably exploited the price hike due to matches in November and December, the report highlights.
Potential solutions are presented to tackle this momentary escalation ranging from the utilization of cruise ships, short-haul shuttle flights, and camps in the desert. However, private land owners and large hotel proprietors have incorporated similar solutions while expanding their rents.
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source - Citysacepe Intelligence
