Expert expects steep fall in rents

By Angelo

Expert expects steep fall in rents
Web posted at: 11/21/2006 2:1:1
Source ::: The Peninsula doha • An expert on real estate market has said house rents in Qatar might fall by 30 per cent after the Asian Games which will start here on December 1.

Naif Al Hajri, who is also a businessman, told a local daily that he agreed with the opinion that housing rents would witness a decline. However, it will be in a phased manner, he added. He, however, disagreed with the view that rents might tumble as much as 70 to 80 per cent.

He asked the government to fix a better criterion to classify contractors and provide facilities and services to them. Those getting such facilities should be reputed companies with clean records.

He also called for controls on middlemen who, he said, were the "biggest problems for real estate" and should be severely punished. When asked about solutions to spiralling rents, Naif said that he believed they could be brought down through an expansion in construction activities and also having tall buildings consisting of many floors.

"If the height permitted is four floors, let it be eight floors in order to contain the increasing population," Naif said.

Up for discussion.

" Who believes this?"

Personally - I live at the airport area and house rents for a 2 bedroom flat are 7K for unfurnished and 10K semi furnished.

We have a three bedroom spacious flat. The building has 2 & half floors, we have been asked to vacate as the landlord wants to demolish and reconstruct 2bedroom flats with smaller rooms, and charge three times what we are paying now and no one can do anything.

Your comments.

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By schlaunik• 12 years 1 month ago.
Rating: 4/5
schlaunik

I got here when those 16,000 Qr villas went for 3,500Qr. It's a hustle for those qataris who didn't get dished out oil stocks, they have nothng else to keep up withthe Joneses. I heard about an influx of white collar workers expected to begin immediatly and by the building going on that sounds more true. It will propbably stay the same but commerical property should continue to rise.

As far as experts and surveys the only company you could try to audit in this country is QTel and no one dares do that anyway.

By schlaunik• 12 years 1 month ago.
Rating: 5/5
schlaunik

I got here when those 16,000 Qr villas went for 3,500Qr. It's a hustle for those qataris who didn't get dished out oil stocks, they have nothng else to keep up withthe Joneses. I heard about an influx of white collar workers expected to begin immediatly and by the building going on that sounds more true. It will propbably stay the same but commerical property should continue to rise.

As far as experts and surveys the only company you could try to audit in this country is QTel and no one dares do that anyway.

By rfc• 12 years 1 month ago.
Rating: 3/5
rfc

will its just a matter of supply and demand..since qatar is the fastest developed country among GCC accdng. to the latest GNP of qatar...therefore the expats will continous to flood..and it cause a lot of demand on housing..since a lot of housing projects are on the process...and it causes housing rentals soar...no matter if the asian games is done..

By lzxcoco• 12 years 1 month ago.
lzxcoco

who is expert ??????

they just talk loud........or b/s

By satria• 12 years 1 month ago.
satria

qatarliving.com

By Frankie• 12 years 1 month ago.
Frankie

Any links to villa rental websites in qatar would be appreciated.

By hamlet• 12 years 2 months ago.
Rating: 4/5
hamlet

At last I find someone who says what I have been saying for years now, why would a country with vast empty lands and very low population density, opt for reclaiming the sea and build high towers! People have to understand that such measures are not signs of modernization and when they are done in some “developed” countries such as Holland and Hong Kong it is to solve problems of congestions and lack of land, and when they do the price is very high:

• Very high construction costs compared to conventional horizontal expansion on main land

• Possible threats due to sea erosion

• Huge pressure on infrastructure

• Recent studies linked living and working in high floors to physiological problems and depression

And the list is very long

I love this country, and I am really proud of all the efforts, but I would love to see all that money and effort going into the creation of more sustainable development, for the welfare of every one, citizens and expatriats

By AHMAD44• 12 years 2 months ago.
Rating: 4/5
AHMAD44

Twenty years ago somebody came up with an idea of doing something UNIQUE in qatar by building a housing compound by the beach where every house has a boat-parking and its own little private beach and you could fish out of the window and it was so awesome as an idea...i beleive they called it the BLUE LAGOON or WEST BAY LAGOON at first, the name changed a little every few years as the projects level of failure fluxuated......i was little kid when they put up the adds and posters on the streets and i thought WOW awesome a beach instead of a front yard!! I'm old now! And the idea of the BLUE LAGOON has just now....just in the recent year or two ago managed to come to a type of completion with only a 70% failure rate when compared to the original vision!! Its now basically just a freehold luxury compound, and i dont think any house in it you can fish from the window!!

Eventhough that project was years ahead back then, the new projects havent learnt anything from it as a lesson!! The PEARL qatar as big and prosperous as it looks on paper is going the same direction! The first phase is two appartment buildings and not even one has been bought!! Commercial bank keeps extending the number of years you can finance it and still nobody is interested! Remember this post when they declare the project has been downscaled to just those two buildings!! And even then they still wont be filled!!

By lzxcoco• 12 years 2 months ago.
lzxcoco

we all want something unique. may be qatar can build an underwater compound......

By qatexpat• 12 years 2 months ago.
Rating: 3/5
qatexpat

I understand that the single major cost component in the buildings in the west bay/reclaimed areas is the piling... On solid land you can build three buildings with the same amount of money against two in the reclaimed area. Anyway, Qatar has huge swathes of unused land. By horizontal expansion, instead of vertical, there will be better and balanced infrastructural development.

By AHMAD44• 12 years 2 months ago.
Rating: 2/5
AHMAD44

Pothole Research your going into the issues of poor infrastructure and road/housing planning which i think we should start a whole new thread about cause its also a frustrating issue which is caused mainly by the huge gap between the people who sign the papers for things to happen and the people who are actually working on it, this leads to the original plan always being nothing like the finished product.

As for butterfly the construction excuse many builders are using today and it is true that cement has gone up about 400% per sac in price that makes a difference when your gonna use many of them in a large house or appartment building, but also mainly the wait in line to get ready-mix and even soft sand has become a long wait because of the main outlets not producing enough to meet the construction demands today! Ofcourse the priority is given to the companies that are building huge projects that are not accomadation-related.

The quality of the construction has always been too high in Qatar, i am not talking about the the quality of the furniture or the finishing of the bathrooms or kitchens, ofcourse companies will go for the cheapest they can find when it comes to tiles/paint/windows/doors etc. I am talking about the thickness of the walls and the foundation of the house which is exaggerated because we dont have earthquakes or extreme weather conditions here. Even when you install wireless internet your signal cant get passed one room!! So there is a study in place to maybe tone it down a little to save up to 30% of the construction material and also reduce the price. As for the cheap finishes inside the house then everyone who buys a house these days already keeps in mind that they will have to redo all of that before they move in.

And you are right about landlords being super greedy, they wont nudge, i live in the westbay area and houses in my part were the cool houses back in the eightees but now they are just old! And there is a house in the corner which wall also just repainted and a FOR RENT sign placed on it for months!! We know the guy and we talked to him, he said 30,000 a month not a riyal less, i would rather wait than settle for a riyal less!! He just waited for ages! But in the end some company was brining in a small manager position and guess what they signed a long-term rent agreement for that price! The guy won and is getting paid more for his 25-year old house now that he would have gotten when it was brand new!

By anonymous• 12 years 2 months ago.
anonymous

"If the height permitted is four floors, let it be eight floors in order to contain the increasing population," Naif said.

Hello........... Are we having a shortage of available space here???? I don't understand this Gulf obsession for building high and reclaiming the sea. Not to mention, the cost of driving piles for foundation strength required by these high rises. And, did I forget to mention traffic congestion which is a direct result of this build high obsession?

By feelreal• 12 years 2 months ago.
feelreal

Can anyone clarify the rent increase cap law as passed by Emiri decree?

I believe it is supposed to cap annual rent increases to 10%. However my 'friendly' estate agent tells me this only applies to unfurnished properties- and that means the Qatari unfurnished (no kitchen or fittings, A/C if you're lucky).

Would appreciate any pointers on this- although I know its probably not enforced either way.

By Tigasin321• 12 years 2 months ago.
Rating: 4/5
Tigasin321

I agree Angelo. Sad to say, I think any significant rent reduction is just wishful thinking. I have a friend at the Ministry of the Interior who told me that they have received application for another 50,000 ex pat visas starting January 2007.

Also, I know two local landlords who are so confident that the market will stay buoyant they are in the process of developing new compounds. They are complaining that they can't get enough work permits for their builders.

I think the best we can hope for is a stabilization of prices and a better choice and quality of accommodation for the same money.

By Angelo• 12 years 2 months ago.
Rating: 3/5
Angelo

Please do not forget, Qatar put the demolition of many areas on hold due to housing difficulties expected during the Asian Games. These areas like Bin Manmood, Rayyan etc, which house a lot of mid to low income families will have to find new housing, most of them have already received notice to vacate by 31st Dec or Jan. Where will these people go? They will obiviously look for new houses, so there is always demand.

I don't figure, why were these issues not considered before Qatar Govt' started a major demolition (beautification) drive. Are these low to mid income families not the major contributor to the economy and life in Qatar. - I hope you understand what I am saying here.

I do not think the rents will fall, besides there are about 200 high rise office / buildings coming up in west bay. there will be more people coming in ( but sensible people as they will insist on company housing ).

By han19• 12 years 2 months ago.
Rating: 3/5
han19

and here i was just hoping to hear some good news, even if not totally true.

well anyway, we can still keep hoping.

for the many families who truly sustain on a salary of 6000-8000 a month, i do wish the rents come down,its cruel that most families had to resort to sharing accomodations or sending their families back to their home countries because the rents are rocketing sky high, but their pay is just the same.

By butterfly• 12 years 2 months ago.
Rating: 3/5
butterfly

Where did you get your theory of "construction material being too expensive" from? It sounds like the same old excuse to me.

Did you know that the prices increased by 52pc last year? Inflaction is reaching worringly high levels. Of course, in a country that is booming as fast as Qatar is, you can expect inflation to rise a little. But crazy inflation here is mostly driven by crazy rents. That doesn't sound like a healthy economy to me. Downgrading in qality? sadly the quality of new housing in doha has already very poor standards.

The sad thing is that rents will fight to stay up becuase landlords are greedy. Because often they will choose to have their 30,000QR villa empty for months until they find some poor idiot that its ready to pay that price. This, has a direct impact on the prices of smaller villas, flats and so on.

The after games will surely help to decrease rent prices a little . But mostly, ensuring that there is a HUGE amount of housing supply to exceed the demand will hopefully bring the prices down to realistic, wages-matching levels .

By qatexpat• 12 years 2 months ago.
Rating: 5/5
qatexpat

I have been speaking to many highly placed people on the rent levels in Qatar. The opinion I have got from them is that the rent levels may dip a little bit immediately after the games but will come back to the present levels in just about 6 months - ie; by July 2007 they will be back at today's levels...

So, I don't think there will be any real drop at all. In the medium term however, there may be hope still. Once QP gets their quarters ready and all their staff move in, we might witness some availability in the market which should bring rents down. Lets hope !!!

By AHMAD44• 12 years 2 months ago.
Rating: 5/5
AHMAD44

The rent issue has been driving Qatar crazy this year! The price of rent has become over-inflated to a point where everyoen wishes they could make money here but live somewhere else where most of you money wont go towards rent. And yes many land/home owners took advantage of this price raise too much by splitting what they already own into even smaller portions and charging more for each, we have a house near ours in which the owner had built two smaller outdoor additions to the house for his sons when they first got married it helped them until they were ready to move by themselves, but as soon as the rent prices went up he just put a fresh paintcoat on the house and rented it out as 3-houses!! Its still one house with two small additions, each addition being one bedroom/bath/small living, and the guy rented it for 3 families to live in and charges each more than it would have cost to rent the entire thing three years ago!

The theory with rents going down after the Asian games is more like wishful thinking for the meantime because many companies that provide accomadation to their employees have already signed long-term contract at the current high prices and the owner has the right legally to go up a percentage every year so why would he choose to lower the rent? Higher construction and land prices also gaurantee the prices wont go down soon, people will just have to adapt somehow and live in smaller spaces!

However there is a light at the end of the tunnel when looking at it from another point of view which is maybe by the time the new Gulf Cement company gets going in the next two years that drops the price of construction a little, and also many studies have been done showing that the current construction standards are too strong and walls are too thick, foundations are too deep, so maybe they will reduce the standards by up to half!! I dont like the idea of downgrading in quality or integrity when you have to depend on construction companies that care only about money because then i have to worry about the roof falling on my head everytime i sleep!! So i am leaning towards the new cement company to make it so available that prices drop.

I dont think people should be spending more than 25% of their income on housing. That totally ruins the equation of making money and providing for your family when your paying 7-10thousand for a small appartment!!

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