Mass complaints emerged in the lead up to the World Cup when tenants found themselves being forced to either leave the property or sign a more expensive deal as part of a contract that would last at least two years.
Real estate experts have noticed an increase in property hunters in the aftermath of the World Cup as residents across the country search for a drop in prices after months of extortionate rates.
Speaking to Doha News, experts said clients delayed their search for new homes at the end of 2022, when complaints surrounding an increase in rent prices first emerged. Shockingly, some families saw their rents double in 2022.
While residents expected the prices to drop after the final World Cup whistle was blown in Qatar, this has yet to reflect on the market. However experts say with any real estate market across the globe, including Qatar, prices will continue to fluctuate based on supply and demand.
“We forecasted a dip in residential market demand during the World Cup as many clients postponed their property search until after the world cup and that was expected as the majority of the population’s attention shifted towards the largest major sporting event,” Jawdat Al Kateb, the General Manager of Coreo Real Estate said.
As more supply becomes available in 2023, experts told Doha News the market is expected to become more competitive, that in effect will cause landlords to price their properties at more competitive rates to attract tenants and buyers.
“The hike in rent is not warranted or justified in any way”
Doha resident
Ahmed Al-Khanji, CEO and Co-Founder of Hapondo, Qatar’s first homegrown real estate marketing platform, told Doha News that there is already a drop.
“Prices are dropping, but they didn’t drop properly yet. Some of them did. It’s not going to be a crash, it’s basically a market correction,” he explained.
Average prices of Airbnb witnessed a sharp hike in the months leading up to the world cup. The average monthly Airbnb price stood at $72,396 in August 2022, and is now $32,652.
“We [Hapondo] already noticed a 10%-20% decrease. A lot of people are decreasing the prices before the market forces them to, so that they can capture as many people as they can and get their properties leased as soon as possible,” he added.
Meanwhile, Coreo Real Estate experienced an average of 150% increase in demand for those searching for new home in the weeks following the World Cup, “showing that tenants and buyers are now actively looking for properties and to meet that demand we are also seeing new supply gradually entering the market,” said Al Kateb.
“There is a saying in the real estate market that real estate could get sick but it cannot die. Three months time, six months time but we will definitely see it,” said Al-Khanji.
On the hunt for reasonable prices
Mass complaints emerged in the lead up to the World Cup when tenants found themselves being forced to either leave the property or sign a more expensive deal as part of a contract that would last at least two years.
Al-Khanji said the World Cup created some kind of ‘fomo’, referring to the term used for ‘fear of missing out’.
“So a lot of people marketed their properties to try to make profit out of their properties or their homes,” Al-Khanji said, noting that the real estate market in Doha saw a lot of “crazy numbers” as prices were all based on the assumption that the demand will be high.
However, during the tournament, many of the properties leased with high prices remained empty.
Al-Khanji believes the landlords thought they’d “capture the opportunity of leasing their property during the World Cup. That was based on the wrong assumption that the demand would be extremely high” amid concerns of an inadequate number of accommodation to welcome an influx of visitors.
With the World Cup now over and visitors back home, residents of Qatar are now ramping up efforts to hunt for new homes, though many say they have yet to see a real difference in prices.
For Sarah and her fiancé Raed, the plan is to search for a home that will allow them to balance the expenses of their new life together.
Raed’s current one bedroom apartment costs him QAR 11,000 on a monthly basis, however, he needs to move out and save as he will now be spending on two people, instead of one.
“The market sets your budget and there’s nothing you can do about it. And in Doha, the place where you live tends to determine your living standards and lifestyle.”
Doha resident
“We’ve been looking since before November. Prices have increased and most properties are excluding water and electricity bills from the rent, so you’re paying more than 7,000 riyals for bad apartments and excluding Kahramaa. We expected the prices to decrease after the World Cup, but they did not.”
The couple were not looking for properties in renown pricey areas like The Pearl, instead focusing the search mostly on areas like Fox Hills, Al Gharrafa, and Ad Dawhah Al Jadidah. However, they have so far been unlucky in finding a new place to live.
Speaking to Doha News, resident Camilla said she cannot move even if prices do drop due to being locked into renewing her contracts for another year at premium World Cup inflated prices.
“The landlord was adamant that he has to raise our rent nonetheless and we have had no option but to accept at these higher rates as there was nothing else available at the time,” said Camilla, who’s husband is currently unemployed, making the burden of the increase especially hard.
“The hike in rent is not warranted or justified in any way, especially considering the overall degraded quality of our furniture and the run down state of the interior. We have mould, peeling paint, and that’s just the tip of the iceberg.”
West Bay, where Camille currently resides and pays a rent of QAR 7,500 for her one bedroom, seems to be seeing a decrease in rental prices. “Seeing prices plummet in our area in the meantime does not help assuage the feeling that our landlord has gotten away with extortion.”
Similarly, Yousef faced the same issue.
“I used to rent a two-bedroom apartment for QAR 7,500 in Lusail. A month before the World Cup and breaking the contract the real estate agency sent a letter saying they wanted to increase the rent to 15,000,” Yousef told Doha News.
He tried to find help, only to be met with a cold response from his real estate agent: “Who is going to help you? Everyone is doing this now, it’s the World Cup.”
Eventually, like many others, he found a small studio that was part of a villa converted into apartments.
For some, landlords increased rent prices even after the World Cup ended.
“A few people are moving out of our compound, so it seems that the landlord wants to make the money back at our expense by raising our rent. We received a notice to let us know that he’ll be increasing the rent by QAR 500,” Maram, a resident, told Doha News.
‘The market is artificial and unfair’
Many residents see the hike in prices as unfair and say they’ve been left living salary-to-salary, giving them no space to save money.
Yousef grew up in Doha, and his entire family still lives here. He has always hoped to be in the country for the long-term. However, the stubborn hike in prices that he’s witnessed is making him reconsider his future in the country.
“People come here for an event for a couple of months and live in the best places Qatar has to offer, then they leave with all their money. Real estate agencies know this and use it to make money. Meanwhile anyone with any type of connection to real investment in Qatar is left paying all their salary in rent and bills.”
This often leaves Yousef, like many other residents, choosing between living further away from work but being able to buy a home elsewhere, or living day by day but forgoing long term security.
“The market sets your budget and there’s nothing you can do about it. And in Doha, the place where you live tends to determine your living standards and lifestyle.”
Yousef has a stable job with a known company in Qatar. He told Doha News that his budget vis-a-vis his salary would be QAR 5,000 if he wants to save any money.
However if he wants to live in an area that has newer buildings, better roads, near his office or just near the metro, then in his experience, QAR 5,000 is not enough.
“I can say the market is artificial and unfair. Prices in 2020 and 2021 and all the way to around April 2022 were acceptable, from then until today it has remained very high.”
He compared his living expenses to friends who live lavishly in Europe and can make purchasing decisions anywhere, despite their monthly salaries being less than QAR 7,000.
He started looking a week after the World Cup finished to see what was available and where, with the idea in mind of renting in April, May, or June, “only if the prices become fair and the government does something about property lease contract.”
New trends in consumer behaviour post-World Cup
Much of the property search trends have changed on the website, according to Hapondo’s CEO, who says people are now increasingly interested in practicality post-World Cup.
Searches for properties that are close to metro stations have surged, as public transportation came under the spotlight during the tournament.
“Before we used to see a lot of people looking for properties in the pearl. A lot of them starting thinking about where they’re gonna live based on transportation and the available facilities that are. We see a lot of people moving to Lusail, Al-Sadd, Al Muntazah, and Al Mansura. Places that are closest to their job where they’d have easy metro access.
Other than highlighting the public transport system in the country, the tournament also showcased the areas of stadiums. “For example, for those who went to Al Janoub Stadium, they noticed a Al Wakrah, and they saw their real estate there.”
The company also witnessed an increasing interest from foreign investors, with Saudi and Turkish investors topping the list.
“Before setting their prices, landlords should do some research. They have to know what the market is. They have to understand the kind of people that they want to target,” said Al-Khanji, who believes rent prices should be compared to salaries, locations and the current state of the country’s economy.
“I notice a lot of properties that have been empty for years because the owner, for example, wouldn’t lower the prices in. It somehow disables the market.”
Al Kateb encouraged landlords to potentially renovate outdated properties to compete with brand new modern residential supply in the market. “We are seeing a gradual increase in supply that is expected to continue over the next few years.”
However, Faraj Abdulla, a partner at Hapondo, told Doha News that many have invested in Qatar’s real estate market since it won the bid some 12 years ago, and so such growth is both expected and normal.
“The number of properties that were developed during the past 12 years, I’m not sure if that’s proportionate with the demand on them. I would question that, because I definitely see more properties than actual demand,” Abdulla, who is currently looking for a property to buy as an investment, said.
“The prices are really high. I’m doing this as an investment and for me, I have better ROI on other properties outside of Qatar specifically, but I want to invest here given that I’m Qatari, and someone who will be here in the long term.”
