Brisk business is brisk business everywhere, and the opportunity of which they are right or wrong comes only once. Barely four months before the start of the 2022 World Cup in Qatar, landlords in the oil-rich country have reportedly increased rents by 40%.
World Cup hosts Qatar have tried everything from cruise ships to desert camps to regional shuttle flights to ensure a limited supply of accommodation can accommodate the 1.2 million expected visitors during the month-long tournament.
Residents in popular neighborhoods say they are being forced to agree to rent increases of up to 40 percent and lease terms of two years. Faced with rents they can no longer afford, some residents say they have been forced to move even after years of tenancy.
Many hotels have been forced to evict long-time residents and make room for teams and officials, leaving few options for residents in a country with an 88 percent foreign population and low homeownership rates.
That has helped reverse the real estate market after more than seven years of slumping demand as entire buildings sat vacant as new residential, commercial and hospitality listings flooded the market.
Rents rose 3.3 percent in the first quarter, helped by a recent surge in demand, according to data compiled by ValuStrat, while average prices on the Pearl, a man-made island area popular with expats with employees, rose 19 percent . Housing was the second-biggest contributor to an inflation rate of 5.4 percent in June in Qatar, where costs are rising faster than any other Gulf Arab country.
FIFA alone has reserved thousands of rooms in hotels and associated residences for players, staff and other officials. Local organizers have also struck deals with property owners to provide around 60,000 homes for fans. Landlords want to benefit from this. An Airbnb search reveals that most of the one-bedroom apartments at The Pearl were advertised for more than $1,000 a night during the tournament. These apartments are currently rented for an average of 9,500 riyals ($2,580) per month, according to ValuStrat, up from 8,000 riyals in the fourth quarter.
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A Qatari government official said that the country’s real estate market “caters a range of preferences and budgets” and that “with increased demand for accommodation during the World Cup, landlords and renters have a legal obligation to honor the terms of their leases with consent”.
“In my opinion, this is a relatively temporary outlier caused by the World Cup and its associated ramifications,” Joseph Abraham, CEO of Commercial Bank of Qatar, said in an interview with Bloomberg TV last month. After the World Cup, “you will see that the pressure comes from rents as there will also be increased supply so that component of the inflation index will go down,” he said.