Posted on September 20, 2013

With house rents on the rise in Qatar, fuelled by massive infrastructure projects and the increasing inflow of foreign workers, experts have called for more housing units in the low and medium segments to address a possible shortage in supply. They warn that the situation may go back to the 2006-2008 level if measures are not taken to diversify the sector and end the dominance of a few players in the market.

The Qatar National Bank (QNB), in its latest report, said the rapidly growing population that is set to cross two million by the end of this year could further push up house rents, the main contributing factor to the rising inflation in the country. Inflation has gone up to 3.1 percent over the past one year, which is mainly attributed to a hike in house rents.

With 120,000 new jobs expected annually over the next two years, demand for residential units from expatriate workers will see a drastic rise.

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“House rents have started rising but the situation has been stable until now. The country is not likely to witness a severe shortage of residential space in the short term. But a situation close to what existed during 2006-2007 may arise again, when work on new projects go in full swing, attracting huge number of foreign workers to the country,” Ahmed Jassim Al Jolo, Chairman of the Qatar Engineers Forum, told The Peninsula yesterday.

He said, despite the increasing demand, a number of housing units still remain vacant because the owners are not in a hurry to rent them out, anticipating a further hike in the prices. Al Jolo called for more housing units in the medium segment as well as “labourers’ cities” to accommodate the large number of foreign workers being recruited by the country.

He, however, noted that a two-bed room flat may no more be available at QR4,000 or QR5,000, with a rapid rise in demand.

According to recent statistics, the average monthly rents for a fully furnished two-bed room and three-bed room apartments in areas like Al Sadd, Najma, Bin Mahmoud, Airport Road, Muntaza and Mansoura have reached QR7,300 and QR8,600, respectively. Rents for high-end apartments in West Bay and The Pearl Qatar range between QR14,500 and QR15,000.

“We need more housing units in the medium segment — say between QR9,000 and QR10,000 — instead of the luxury segment,” said Al Jolo.

source: The Peninsula

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