By: Alex Ionescu
At the beginning of 2020 we were hearing all over the news that a new virus was spreading rapidly. Not later than March 11th 2020, the outbreak of the Novel Coronavirus (COVID-19), was declared by the World Health Organisation as a “Global Pandemic”, with travel restrictions being implemented by many countries.
2020 has passed and we can now say that even though the global pandemic has had a huge impact in all sectors of the real estate market, 2021 came with new hope and a breath of fresh air for Qatar’s real estate market, as the blockade imposed in 2017 is gradually being uplifted.
We are now getting closer to the 2022 FIFA World Cup, looking at almost 18 months until the kick-off, and the residential leasing market is yet to recover, as the actual people representing the residential target- market are waiting for approvals prior to arriving to Doha, due to the imposed restrictions on traveling, such as entry permits and availability of quarantine hotels.
There is a slight increase in demand in the residential sector, however, we are still looking at a buyer’s market as the supply is significantly higher. As the imminent second wave of the pandemic is expected to hit, we are expecting further restrictions in all sectors, thus expecting the imbalance between supply and demand to continue until the summer.
Even though the government has tried, during last year, to introduce incentive measures in order to help the hospitality sector, during 2020, not all the hotels were accepted as a COVID-19 approved lodging, thus with all the restrictions in place, worldwide, the hospitality sector was one of the most affected.
We can fairly assume that we are experiencing a historical transition to a new economic reality. In fact, due to oscillating indicators, quantification is close to impossible hence market predictions are almost absent. What we have learned from this last year is that in an uncertain business environment for real estate services, we have to embrace change and look at it as an opportunity to evolve and adapt to the new market reality.
We increased our marketing expenditure and we moved all operations online. We are now very active with 3D mapping of all of our properties, in order to give unprecedented in-depth access to our clients from the safety and comfort of their homes. We have significantly increased the response time for any received inquiry 24/7 by rostering our professionals to mandatory online duty.
We are creating more online content than ever, in order to keep connected to our customers. We have moved most meetings in the virtual space and we have realized that it is a system that not only works but creates more employee satisfaction via working from home, as they get to spend more quality time with their families.
Due to the major infrastructure projects being recently awarded to contractors, we have seen an increase in industrial and logistic demand, as well as an increase in demand for offices. Regarding the latter, there we observed a pattern by looking at relocating companies. They are starting in a small space for incorporation and licensing purposes and transitioning to larger spaces at the time of “all hands on deck”, for a full-fledged operation.
The 2022 FIFA World Cup is approaching and, with it, new challenges arise. The numbers of staff for all service providers are starting to coagulate and at first glance, so are the prices expected by the landlords for this period. We see here a division in realistic and unrealistic expectations. However, it is still uncertain if there will be any involvement towards capping these rates from the governmental institutions. We have studied the last two similar events and, in both cases, there was involvement from both governments. This does not mean it will be the rule for the World Cup. Many service providers are removing the risk and are securing their staff accommodation from now, at the landlord’s rates, just to ensure smooth operational flow during the event. Others decide to wait and postpone securing staff accommodation from now until a clear conclusion on COVID-19 restrictions and prices would settle.
What is certain at this point is that the demand for accommodation will be the same. However, the delivery time for these contracts will be much shorter than the other two previous events.
We are looking at increased activity in all sectors of the real estate market, once mass immunization has been achieved and traveling restrictions have been relaxed, though not sooner than the third quarter of 2021. Brokers and landlords have the advantage of using all this time to perfect their approach to the demand spike that will happen in the third and fourth quarter of 2021 and throughout 2022.
This article was published as part of the fifth edition of Property Finder Qatar’s Trends Report