The residential sector remains attractive to real estate investors. Around 12,600 residential units are expected to be added to Qatar’s realty market in the fourth quarter (Q4) of 2022 according to a report released by the real estate consultancy firm ValuStrat.
“Approximately 12,600 units are in the pipeline for Q4 2022 of which 72 percent of this additional supply comes from two master projects in Al Wukair,” noted the third quarter (Q3) Real Estate Market report by ValuStrat.
The residential stock exceeded 310,700 units with the addition of 600 homes during Q3 2022. New additions during the quarter include low-rise residential projects in The Pearl, Lusail, Duhail, Al Wakrah, Old Ghanim, Al Sadd and Umm Ghuwailina.
Ezdan Real Estate launched Al Janoub Gardens this quarter which is projected to add 2,368 fully furnished apartments once completed by the end of 2022.
Regarding residential sales the Q3 report noted that the transaction volumes witnessed substantial declines this quarter, down 44 percent quarter on quarter (QoQ) and 39 percent year on year (YoY). The median transacted ticket size for houses was QR2.6m, up by 6 percent QoQ, but 1.9 percent lower than Q3 2021.
Al Wakra, Muaither, and Al Khor had the highest volume of transactions of residential houses during Q3 2022 and 41 transactions for residential buildings were recorded as of Q3 2022, with 50 percent concentrated in Fereej Bin Mahmoud, Umm Ghuwailina and Old Airport. Value and volume of transac-tions in The Pearl and Al Qassar surged by 11.6 percent and 4.6 percent in the year to Q3 2022.
The residential performance showed upward pressure on leasing rates which continued with the median asking rents up 5.2 percent quarter on quarter and 15 percent YoY “We have observed landlords pre-leasing their units for January 2023, quoting rents 10 percent lower than the average asking rent of comparable units during Q3 2022,” the report further stated.
It added that the median listed rent for apartments grew by 5 percent quarter on quarter and 16.4 percent YoY with median rent for 2-bedroom apartments experiencing the highest quarterly increase of up to 9 percent. Three-bedroom villas experienced the highest increase in median rent of 9 percent quarter on quarter compared to other bedroom types. A minimum contract of 2 years, with up to 5 percent discount on average rent, is common place.
In Q3 2022, ValuStrat Price Index (VPI) noted that residential increased to 65.3 points. The index grew by 0.8 percent over the previous quarter, recovering back to a level last seen in Q3 2021. The VPI is a valuation-based price index with a base of 100 points as of Q1 2016.
The apartment market appreciated 0.9 percent compared to previous quarter. Units in The Pearl and West Bay Lagoon saw capital gains of 1.6 percent and 2.2 percent QoQ, respectively. Conversely, prices of apartments in Lusail de-clined by 0.5 percent compared to Q2 2022.
Like the apartment market, the villa market also grew 0.7 percent this quarter, indicating slight market recovery. This growth is mainly attributed to units in Muaither & Al Khor, whose capital values increased by 3 percent and 2.9 per-cent. Similarly, villas in Ain Khaled, Al Thumama, Onaiza, Al Khairtiyat, Umm Salal Ali & Al Wakra also exhibited gains of up to 0.8 percent. Old Air-port and Duhail were the only areas whose capital values receded 0.6 percent & 0.2 percent. Villas in The Pearl, West Bay Lagoon & Al Waab showed no price movement this quarter.
Gross yields for residential units exhibited an increase to 6.5 percent this quar-ter. Apartments recorded 9.6 percent while villas accounted for 5 percent.
Price-to-rent ratio averaged 17.5 years for residential units. With apartments more specifically at 10.5 years and villas at 21 years.