White Paper

Residential Market and Affordability Levels | Doha

November 2014

Dohas Residential Market

Market Performance, Trends and Affordability

Introduction

Ian Albert
Regional Director | Middle East
Colliers International
ian.albert@colliers.com

Peter Bibby
Director | Qatar Country Manager
Colliers International
peter.bibby@colliers.com

Supply scarcity in Dohas housing market offers a

strong foundation for opportunity. Average rental rates in
2014 have increased by 14% compared to average rentals
in 2013. Sales prices have also witnessed an upward trend,
albeit increasing by a lower rate of 6% during the same
period.
Despite attempts by developers to meet the acute supply
gap, the compounding undersupply has resulted in
unaffordable accommodation costs, both within the highend as well as the mid-market developments.
Affordability is a relative measure, especially in a growing
real estate market, such as Qatar, with one of the highest
per capita incomes in the world. A commonly accepted
guideline for housing affordability is when accommodation
costs are within 30% of a household's gross income. In the
latest income and expenditure survey by the Qatar
Statistics Authority (2012/2013), expatriate households
spend 34% of their income on housing. This percentage is
only likely to increase in the future given the acute
undersupply in the market.
With 70% of households in Doha (excluding blue collar
workers) earning between QAR5,000 and QAR19,999 per
month, the majority of residents can afford rental levels
between QAR1,700 and QAR6,800 per month.

Mansoor Ahmed
Director | Development Solutions
Colliers International
mansoor.ahmed@colliers.com

Colliers International

While the provision of affordable housing involves

important social and economical values, our focus in this
whitepaper is aimed at highlighting Dohas overall
residential market performance, trends and some strategies
for addressing the growing demand for affordable housing
towards a sustainable and competitive asset class.
The availability of affordable housing not only improves
worker and employer attraction and retention, but it also
increases the overall spending power of households. These
households can then afford to improve their existing
quality of life by increasing their spending on vital social
infrastructure facilities such as better levels of education
and healthcare for their families.

Colliers International is a global leader in commercial real

estate services with over 15,800 professionals operating out
of more than 485 offices in 63 countries. Colliers
International delivers a full range of services worldwide that
includes: valuations, consulting, appraisals, brokerage, asset
management and research, within the residential,
commercial, retail, hospitality, healthcare, education,
infrastructure sector, Public Private Partnership (PPP) and
economic and industrial free zones. In MENA Colliers
International has provided leading advisory services through
its regional offices located in Dubai, Abu Dhabi, Riyadh and
Jeddah since 1996. The latest annual real estate survey by
Euromoney named Colliers International Best Advisor in
the MENA region, UAE, Qatar and Saudi Arabia.

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

The housing shortage in 2014 is at 37%, approximately

47,500 homes. The expectation is that the shortage will
increase further up to 85% in 2018.

Existing Residential
Landscape

Doha currently has approximately 1.2 million inhabitants

and 727,000 households. This is expected to increase to
1.7 million inhabitants and 1 million households by 2018,
translating to an increase of 9% (CAGR) in relation to
the current level.

Dohas existing housing stock of approximately 129,000

units comprises of apartments being 66%, with the
remaining 24% being villas. While a limited 5% of
apartments are owner-occupied, the ratio of owneroccupied villas are significantly larger at 45%. The
majority of these villas are owned by Qatari nationals.
Dohas housing market has been affected by an acute
shortage for years. There is little or no vacancies in the
residential market. Growth in housing stock fails to meet
the growing number of households. The number of
households has risen considerably in recent years, due to a
sharp rise in the growth of the population.

Exhibit 1: Distribution of Residential Units in Doha

With the supply shortage increasing annually, the

accommodation costs have also been escalating. Quality
developments, in close proximity to vital social
infrastructure facilities such as schools, hospitals and
retail facilities together with good accessibility / road
networks, remain more competitive than developments
that lack such facilities. As illustrated in Exhibit 3, the
majority of residents in Doha are within a kilometer to
asphalted roads and retail outlets.
Exhibit 2: Households in Doha by Types of
Ownership
100%

24%

21%

80%
60%

79%
95%

40%
20%
76%

Villa

5%
Owned
Apartment

0%

Apartments

Source: Qatar Statistics Authority

Rented
Villa

Source: Qatar Statistics Authority

Exhibit 3: Distribution of Households in Doha by Proximity to Vital Community / Infrastructure Facilities

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

10%

22%

30%
29%

39%
96%

48%
60%
33%
20%
Hospital / Health Center

Shops (Food Items)

Less than 1 km

1 - 5 km

Primary School

Asphalted Road

More than 5 km

Source: Qatar Statistics Authority

Tenant and investor preference are towards developments with

accessibility to healthcare facilities, schools, retail and road
networks
3

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

Demand Vs. Supply

Doha has suffered from a continuous undersupply of
residential units resulting in increasing house prices
making living in Doha unaffordable for many.
According to the latest census, Doha had a total of
97,555 units in 2010. Colliers International estimates that
by the end of 2014 this number will exceed 129,200
units. An additional 8,200 units are due to enter the
market during 2015 2018. Despite a 3% annual
increase in supply, high population growth rates of
approximately 11% per annum are expected to
continuously keep existing market fundamentals in an
undersupplied market.
Research conducted by Colliers indicates that
approximately 44% of the existing residential stock
consists of two bedroom units, followed by 36% of three
bedroom apartment units. In contrast, the majority of
demand recorded is for one and two bedroom units with
requirements for three bedroom apartments remaining
limited.

While all Qatari and GCC nationals can own property on a

freehold basis, non-GCC nationals are limited to The Pearl
Qatar, West Bay Lagoon, Lusail and the Al Khor
development.
Exhibit 4: Distribution of Apartment Supply in Doha
100%

6%

90%
80%

36%

70%
60%
50%
40%

44%

30%
20%
10%

15%

0%
Apartment Supply
1BR

2BR

3BR

4BR

Source: Colliers International

Exhibit 5: Doha Residential Demand and Supply

Source: Colliers International

Residential demand is clearly defined by nationality. While the

majority of Qatari nationals live in villas (63%), the majority of
non-nationals live in apartments (51%)

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

Affordability in the
Rental Market
Affordable housing takes many different forms, and
this whitepaper uses the term to define all housing units
at levels affordable to average households in Doha.
Analysing the latest available income and expenditure
surveys published by Qatar Statistics Authority
(2012/2013), suggests that average expatriate
households in Doha spend approximately 34% of their
income on housing (household spend of Qatari
nationals has been excluded from this analysis since
82% are home-owners).
The average spend on housing in Doha is considerably
higher compared to a number of established
international benchmarks, such as the Department of
Housing and Urban Development (USA) and NSW
Government (AUS), where the accepted definition of
affordability is for a household to pay no more than
30% of its annual income on housing. In the UK, The
National Housing Federation defines affordable rent
levels at 25% of household income.
Colliers rental affordability analysis excludes those
earning less than QAR4,999 per month, since this
income category are generally blue collar workers and
are provided with labour accommodation.

The distribution of income levels in Doha suggests that 11%

of total households are earning less than QAR4,999 per
month. As households in this income category which is
generally provided with accommodation by their employers
(mainly comprising of contractors, hospitals, hotels and
retailers), are living in alternative accommodation facilities,
they are omitted from the study. An analysis of monthly
household income levels also suggests that 70% of Dohas
total households earn between QAR5,000 and QAR19,999
per month. This income bracket, can afford rental levels
between QAR1,700 and QAR6,800 per month.
Households earning between QAR20,000 and QAR39,999 a
month can afford rentals ranging between QAR6,800 and
QAR13,600 per month. This market represents 25% of total
households in Doha. The highest income bracket represented
by households earning QAR40,000 and above per month
are a limited 5% of total households. Rental affordability at
this top tier of the market starts at QAR13,600 per month.

70% of households in Doha can

afford monthly rentals between
QAR1,700 and QAR6,800

Exhibit 6: Monthly Household Income Distribution in Doha & Rental Affordability Levels

20%
15%
10%
5%

Rental Affordability:
QAR 3,400 QAR 6,800 p.m

25%

29%
Rental Affordability:
QAR 1,700 QAR 3,400 p.m

30%

18%

QAR 5,000 - QAR

9,999

QAR 10,000 QAR 19,999

QAR 20,000 QAR 29,999

7%

0%
QAR 30,000 QAR 39,999

Source: Colliers International

*Excludes those earning < QAR 4,999

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

Rental Affordability:
QAR 17,000 + p.m

35%

Represents 5% of Doha Households

Rental Affordability:
QAR 13,600 QAR 17,000 p.m

40%

40%

Represents 25% of Doha Households

Rental Affordability:
QAR 10,200 QAR 13,600 p.m

Represents 70% of Doha Households

Rental Affordability:
QAR 6,800 QAR 10,200 p.m

45%

3%

2%

QAR 40,000 QAR 49,000

QAR 50,000 +

Rental Rates
Due to the strong demand and limited supply in the
housing market, rent prices have risen over the past few
years, a trend which is likely to continue.
The level of the average rent price (per m usable area) has
also witnessed a strong performance since 2012, driven by
a combination of strong economic fundamentals and
population growth in an already undersupplied market.
This is shown in an analysis of average rental prices across
apartments in key residential districts of West Bay, Al
Sadd, Old Airport and the Pearl Qatar.

Among the primary reasons for the higher YOY increases

in Al Sadd and Old Airport is due to a number of new
developments predominantly offering furnished units.
Despite Pearl Qatar being a popular destination for luxury
living, accessibility and traffic conditions when commuting
to and from the Pearl and the CBD/West Bay is becoming
challenging. Traffic is further exaggerated by the Metro
works in the area, and is unlikely to be resolved
immediately.
Exhibit 7: Average Apartment Rental Rates by Unit
Type Q3 2014
250,000

16%
14%

14%

14%

14%

200,000

AED p. a.

11%

Areas in and around Doha Municipality have the highest

demand in the rental market. This is among other factors,
due to the majority of companies offering accommodation
and transportation for their staff, and therefore, the need to
be located in proximity to the Central Business District
(CBD).

12%
10%

150,000

8%
100,000

6%

YOY % Growth

Since 2008, rent prices have shown a cumulative rise of

approximately 7%. Average rents in apartments, across
Doha, increased 14% year-on-year (Q2 2013 Q2 2014).

4%
50,000
2%
0

0%
Old
Airport

High rentals already achieved in the Pearl Qatar, have

witnessed 11% rental increases, while more affordable
districts of Al Sadd and Old Airport have increased by
14% during the same period.

1BR

2BR

Al Sadd West Bay

3BR

Qatar
Pearl

Average YOY Growth

Source: Colliers International

Average rents in the Pearl Qatar have witnessed 11% YOY

rental increases, compared to 14% achieved in West Bay, Al
Sadd and Old Airport
Exhibit 8: Average Apartment Rental Rates across Doha
1,000

20%
14%

900

15%
10%
4%
5%

600
-3%

500

0%

400

-5%

300
-15%

745

634

614

639

700

799

100

-10%

-15%

2008

2009

2010

2011

2012

2013

2014

200
-

-20%

QAR per m p.a.

YOY Growth

Source: Colliers International

-15%

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

YOY % Growth

10%

700

875

QAR per m p.a.

800

Rental Rates in Primary Apartment Districts

As illustrated in Exhibit 9, those earning QAR18,000 per

month are not only limited to Al Sadd and Old Airport, but
are also restricted to one bedroom units within these areas.

According to Colliers Rental Affordability Analysis,

households earning between QAR18,000 QAR28,000
can afford to rent apartments in Al Sadd and Old
Airport. Households with a minimum income of
QAR31,000 can afford apartments in West Bay, while
renting an apartment in the Pearl would require a
minimum monthly income of QAR 35,000.

Rental options for households with a monthly income of

QAR28,000 includes larger 3 bedroom units in Al Sadd
and Old Airport.
While West Bay is affordable to households with a
minimum monthly income of QAR31,000, the Pearl Qatar
is affordable only to households with monthly incomes of
QAR35,000 and above. These households represent just
12% of Dohas households.

Exhibit 9 highlights rental options across popular

apartment locations in Doha. Noteworthy, is that the
majority of these apartments are affordable for a
limited 30% of Dohas households.

Popular Residential Districts of West Bay, Pearl Qatar, Al Sadd

and Old Airport are affordable to 30% of Dohas Households
Exhibit 9: Rental Affordability Analysis : Affordability in Popular Apartment Districts

Pear Qatar Average Rentals

1BR

2BR

3BR

144,000

186,000

228,000

West Bay Average Rentals

1BR

2BR

3BR

126,000

163,300

204,000

Al Sadd Average Rentals

1BR

2BR

3BR

75,600

102,000

114,000

Old Airport Average Rentals

Household
Monthly Income

1BR

2BR

3BR

72,000

90,000

108,000

QAR 35,000 QAR 55,000+

QAR 31,000 QAR 50,000+

Source: Colliers International

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

QAR 18,000 QAR 28,000+

Rental Rates in Dohas Popular Compounds

A significant number of Dohas compounds are rented
as employee accommodation, predominantly to
local/semi-government companies. Due to better
connectivity to the city center areas, availability of
community facilities, including schools, such
compounds are becoming favoured choices for
companies, although they are generally located 5km
10km away from the city center.
Rentals within compounds vary significantly based on
build quality, community facilities and the furnishings
used.

Lack of supply in this market has however increased

rentals among both high-end compounds as well as more
affordable compounds. Many of these units are leased for
a longer term, and therefore rentals in compounds in Doha
have increased by approximately 10% during 2012 2014
(average apartments across Doha on the other hand
increased 24% during the same period). While, most
government/semi government corporations meet
accommodation expenses of their employees, as part of
their remuneration packages, Colliers analysis suggests
that based on the existing rentals, a limited 12% of Dohas
population can afford to live in such compounds.

Rentals in Compounds are Affordable to a limited 12% of

Households in Doha
Exhibit 10: Rental Affordability Analysis : Affordability in Doha Compounds

Legend
Compounds in Doha

5 km
10 km

8
Average Annual Rental Rates (QAR)
Apartments
1BR
138,000

1BR

Villas
2BR

3BR
146,000

Minimum Average Household Monthly Income (QAR)

Apartments
Villas
2BR
3BR
33,800
36,000
55,000

Source: Colliers International

4BR
225,000

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

242,000

4BR
60,000

Sales Prices

Exhibit 11: Average Sales Prices by Location

18,000
16,000

QAR per m2

In 2014, average sales prices across freehold units in

Doha increased by 6% YOY. The Pearl Qatar remains a
popular investment asset class, with Viva Baharia
witnessing the highest YOY increase of 8% compared
to all freehold developments illustrated in Exhibit 11.

8%

7%

14,000

7%

12,000

6%

10,000

5%
4%

8,000

4%

6,000

High sales prices in Viva Baharia is mainly due to the

developments beachfront location, family-oriented
environment and access to beach clubs, water sports
and F&B units.

9%

8%

3%

2%

13,000

10,750

2,000

16,000

2%

14,250

4,000

1%
0%

Porto
Viva
West Bay - Fox Hill Arabia - Baharia Lagoon
Lusail
The Pearl The Pearl
Plaza

Increasing rentals, and limited freehold supply in

Dohas residential market is likely to improve investor
appetite in the short to medium term.

QAR per m2

YOY Growth

Source: Colliers International

Sales prices have increased 4% YOY.

The highest increase was witnessed in Viva Baharia - Pearl Qatar
Exhibit 12: Average Sales Prices Across Dohas Freehold Market

25,000

10%
5%

6%
5%

2%

20,000

15,000

-5%
-11%
-10%

10,000
-15%

-15%
-20%

19,500

16,667

13,333

11,917

12,125

12,775

13,500

5,000

2008

2009

2010

2011

2012

2013

2014

-25%

QAR per m

YOY Growth

Source: Colliers International

-20%

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

YOY Growth

QAR per m

0%

YOY Growth

Similar to the rental market, sales prices in Doha have

witnessed an upward trend since 2012.

Developing
Affordable
Communities
Successfully
The increasing rental rates continue to be a concern for
many expatriate households in Doha. With Qatars
population witnessing some of the highest growth rates
in the world, the concern for more affordable housing
solutions, both within the rental and the sales market,
are only likely to be exacerbated in the short to medium
term.
Local developers such as Barwa and Ezdan have
attempted to meet the demand for mid-market housing
by constructing more affordable residential
communities. However, given the significant
undersupply in the market, economic forces of limited
supply and increased demand have been met with
higher rentals, which has resulted in an unaffordable
housing market.
Public Private Partnerships between developers and the
government can assist to increase the availability of
more affordable residential communities in Doha.

Land infrastructure by the government is leveraged against

social infrastructure and greater returns to the local
economy. Revenues can take the form of fees for
permissions, zoning, and utilities, or they can reflect sales,
income, or fees generated by construction related
economic activity.
Having access to housing that is affordable by the majority
of households clearly results in both social and economical
benefits.
With innovations in low-cost building technology (costeffective construction methods, and not low-build quality)
being applied across the globe, developers in Doha can
combine these mechanisms to effectively service the
increasing demand for affordable housing.
It is Colliers opinion that offering more government
incentive programs, access to well located and service
land, affordable developer financing options, and Public
Private Partnerships will increase the availability of
housing units that are affordable to the majority of
households.

Exhibit 13: Key Advantages of Developing

Affordable Housing

Increasing
the Buying
Power of
Residents

Conclusion
As seen globally, governments are actively involved in
providing developers access to well located and
serviced land, home investment partnership funds, and
favourable developer financing options as active
incentives for developers to develop affordable housing.

Reduced
Cost per
Employee

Improving
Worker and
Employer
Attraction and
Retention

Source: Colliers International

Public Private Partnership (PPP) is a potential way for developing

Affordable Housing in partnership with Private Developers
Exhibit 14: Primary Benefits of Affordable Housing
Economic Benefits
Revenues can take the form of fees for permitting,
zoning, and utilities, or they can reflect sales,
income, or property taxes generated by construction
related economic activity.
Improving Worker and Employer Attraction and
Retention.

Developer Benefits

Incorporating revenue accelerators (retail / F&B,

healthcare and educational facilities) within
affordable housing communities are likely to increase
the developers overall returns on the project.

Increasing the Buying Power of Residents.

Source: Colliers International

10

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

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11

Residential Market and Affordability Levels | November 2014 | Doha | Colliers International

For further information,

please contact:

485 offices in
63 countries on
6 continents
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EMEA: 84

$2.1
billion in
annual revenue

Ian Albert
Regional Director | Middle East
+971 4 453 7400
ian.albert@colliers.com
Peter Bibby
Director | Qatar Country Manager
Colliers International
peter.bibby@colliers.com
Mansoor Ahmed
Director | Development Solutions
+971 4 453 7400 | +971 55 899 6091
mansoor.ahmed@colliers.com

Colliers International | MENA Region

Dubai | United Arab Emirates
+971 4 453 7400

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