An estimated 4,700 apartments and villas were added during the second quarter of the year, increasing Qatar's residential stock to 341,140 units, ValuStrat noted even as the researcher expects market corrections to continue across all segments of the real estate sector through the end of 2023.
In its ‘Qatar Real Estate Market Overview Q2, 2023’ released yesterday, ValuStrat noted market corrections were recorded across all rental sectors, with median rental rates in the residential, commercial, and industrial segments declining to reach Q2, 2022 levels.
However, during the first half of this year, there was a surge of 144% YoY in the volume of international visitors.
Compared to last year, median monthly rental rates reduced by 2.4% quarterly to QR9,000. Market corrections have been more prominent in the apartment sub-market, with the median monthly asking rent falling by 5.3% YoY and 2.2% QoQ, standing at QR6,250.
While asking rents in the villa sub-market remain 1.6% higher than in the same period last year, with the median quoted monthly rent at QR11,000, this is still 3.3% lower relative to the previous quarter.
After the completion of 25,000 sq m gross leasable area (GLA) in Q2, 2023, office stock has increased to 6.8mn sq m, with 65% falling within the Grade A category.
An estimated 465,000 sq m GLA remains in the pipeline for the second half of 2023. The citywide median monthly asking rent for offices recorded a quarterly reduction of 2%, standing at QR69 per sq m, 3.5% lower than in Q2, 2022.
The ValuStrat Price Index (VPI) for Q2, 2023 recorded a mild 0.3% quarterly decrease, standing at 64.8 points, corresponding to the level of Q2 2022.
The VPI is a valuation-based price index set at 100 points as of Q1 2016.
ValuStrat's general manager (Qatar) Pawel Banach commented, "We expect market corrections to continue across all segments of the real estate sector through the end of 2023. Qatar's economy experienced an exceptional year in 2022, and the sudden fall in demand in the first half of 2023 widened the oversupply gap.
“On the other hand, the consequent decline in rents and prices continue to improve affordability for tenants and buyers. As supply expands in all real estate sectors, the extent of market adjustments directly depends on initiatives taken within the private and public sectors to mitigate a long-term detrimental response."
ValuStrat Qatar Research analyst Farah Ali noted, "Despite the general downward trend in all leasing markets within the real estate sector, we anticipate a reduced rate of decline in rental rates for the second half of 2023.
“With projects across various segments of the real estate sector, particularly in the retail and office markets, being put on hold or experiencing delivery delays, we expect occupancy levels of commercial projects to improve in the medium-term.”
For a detailed perspective on the property market, visit: Qatar - Real Estate Review Q2 2023