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Housing rents in Qatar have surged due to a spike in demand ahead of the World Cup 2022 but are expected to fall again next year, according to a report.
As of June this year, apartment rent increases in the Gulf state accelerated by more than 30% compared to a year ago, after having previously risen by 5% to 7% in the first quarter of the year, property advisory Cushman and Wakefield said.
In its Q2 Real Estate Market Review for Qatar, the advisory firm noted that landlords have taken "advantage of a spike in demand" related to FIFA World Cup, which is slated to take place in Qatar in November and December.
"Rental increases are being driven by demand for accommodation ahead of the World Cup, with tens of thousands of apartments being reserved both for fans and staff accommodation for companies providing World Cup-related services," Cushman said.
The world's biggest football event is expected to boost visitor traffic at the Gulf state. So far, businesses in the aviation sector have noticed a spike in demand for private jets to Qatar. The event is expected to add $17 billion to the Qatari economy.
Rent increases
Rental increases have so far been most evident in the apartment segment of the market, particularly in prime districts, with a typical two-bedroom, semi-furnished flats in Porto Arabia now leasing for QAR13,000 ($3,570) to QAR15,000 per month, up from QAR10,000 to QA12,000 last year.
However, Cushman said the rental increases are not expected to last long, with leasing rates expected to drop shortly after the World Cup.
"Rents [are] expected to fall again in 2023 as demand subsides and available properties return to the market," Cushman said.
With housing rents expected to fall next year, landlords are "insisting" on two-year leases for apartments over recent months, the report noted.
"There is also an increasing trend in tenants not having their leases renewed on request, as some landlords look to vacate their properties and capitalise on inflated World Cup rents."
While Qatar is witnessing a short-term spike in housing demand from tenants, property transactions in the Gulf state have declined in recent months.
Figures released by the Planning and Statistics Authority showed that sales transactions dropped by 19% during the first five months of the year compared to a year earlier. In December, transactions posted a 30% year-on-year decline.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
