The third quarter of 2024 demonstrated ongoing stability within Qatar’s real estate sector, as detailed in a recent report by ValuStrat. Although some upscale regions saw rising rental rates for larger bedroom units, the predominant trend was a marked steadiness throughout the period. In Q3 2024, real estate transactions totaled QAR3.3 billion ($908 million), with transaction values in Al Wakrah, Al Khor & Thakhira, and Al Daayen reflecting an annual increase of 18 percent.
Capital prices in the apartment sector remained stable at around QAR 10,290 per square meter, unchanged from the previous quarter but down 1.4 percent over the last two years.
In The Pearl Island, sale prices reached QAR 10,420 per square meter, consistent with levels observed over the past year.
Likewise, both Lusail and West Bay Lagoons displayed stable quarter-on-quarter trends, with values at QAR 10,125 per square meter and QAR 9,680 per square meter, respectively. Annual data across these three regions showed minimal fluctuations.
ValuStrat Price Index performance
The ValuStrat Price Index maintained its position from the previous quarter at 96.6 points, showing no significant annual variation. With a benchmark established at 100 points in Q1 2021, the apartment index recorded a value of 97.5 points, while villas stood at 96.3 points, with both categories exhibiting no changes on a quarterly or yearly basis.
Villa market pricing trends
Villa market prices also held steady at QAR 5,507 per square meter, with a slight decline of 1.7 percent over the past two years. Most locations for villas exhibited stability quarter-on-quarter, with the exception of Al Dafna, where a 1 percent increase was recorded.
Price-to-rent ratios and yields
The price-to-rent ratio for The Pearl, Lusail, and West Bay Lagoons dipped slightly, indicating a marginal improvement in rents quarter-on-quarter, while remaining stable over a 19-year span. Residential gross yields were steady at 5.9 percent, with apartments yielding 8.3 percent and villas at 4.7 percent.
Residential stock and new deliveries
As of Q3 2024, the total residential stock reached approximately 396,000 units, comprising 248,000 apartments and 148,000 villas. An estimated 410 housing units were delivered during the quarter, including mid-rise residential buildings and standalone villas.
2024 supply forecast
The supply forecast for 2024 includes 7,000 apartments, with notable projects such as Corniche Park Towers (240 units), Thirty-Five Tower (245 units), Gewan Island (586 units), Fox Hills and Erkyah (570 units), and mixed developments in Doha (850 units). Additionally, around 4,000 residences are expected to be delivered in 2025, with about 40 percent located in Lusail.
Transaction trends in residential houses
In Q3 2024, the volume of transactions for residential houses fell by 18 percent quarter-on-quarter and 15 percent year-on-year. The median ticket size for residential houses was QAR 2.6 million, down 7 percent from the previous quarter and 1.9 percent year-on-year. The top areas for residential house transactions included Al Wukair, Umm Qarn, Nuaija, and Al Khor. The Pearl Island and Al Qassar experienced an increase of 18 percent in total transaction value and a 28 percent rise in transaction volume quarter-on-quarter.
Mortgage and sales transactions
Mortgage transactions decreased by 10 percent quarter-on-quarter and 8.5 percent year-on-year. Similarly, sales transactions dropped by 18 percent since the last quarter and 15 percent compared to the same period the previous year. The Qatar Central Bank, in alignment with the U.S. Federal Reserve, lowered the interest rate by 55 basis points. These concurrent changes suggest that potential buyers may be postponing purchases in anticipation of more favorable interest rates.
Office sector performance
The report also noted that the office sector displayed consistent performance on a quarterly basis, with no significant fluctuations. In the retail segment, organized retail experienced a 2 percent decline, while street retail saw a 1 percent decrease. Approximately 38,000 square meters of gross leasable area (GLA) were added during the quarter with the completion of the Mercedes Flagship Commercial Complex, bringing the total GLA to over 7.2 million square meters.
Upcoming developments in Lusail
One of the remaining Lusail Plaza Towers is expected to be completed by Q4 2024, with the final tower scheduled for delivery by mid-2025. Grade-A office inventory is predominantly located in the Doha municipality, which accounts for 61 percent of the total supply, while Lusail contributes an additional 31 percent. An additional 170,000 square meters of GLA is anticipated to be delivered by the end of 2024. Nationally, office occupancy was estimated at 63 percent, with premium locations enjoying higher occupancy rates compared to secondary areas.
Citywide office rents averaged QAR 66 per square meter, remaining steady from the previous quarter but decreasing by 2.2 percent year-on-year.
Read more: Qatar real estate sector sees 285 deals worth $304.1 million in June 2024
Tourism growth and industrial sector stability
Furthermore, the report highlighted a 25.6 percent increase in tourism year-on-year, reaching 3.9 million visitors, with hotel occupancy rising by 23 percent annually. This growth is largely attributed to government-hosted local and international events taking advantage of the cooler months. In the industrial sector, rental rates remained stable on a quarterly basis, while temperature-controlled spaces saw a 2 percent improvement compared to the same period last year.
Future market outlook
While Q3 2024 presented a stable real estate environment, market signals indicate a cautious outlook for the coming months, suggesting a blend of steady performance with select areas of optimism.
