Sameh Saeid
Doha
Rents of properties are unlikely to increase again in the short term owing to new residential apartments expected to enter the market between now and 2018, feel real estate experts.
The construction of new housing units, the movement of residents from the high-end localities to the surrounding areas in search of less expensive accommodations have contributed to a decrease in rents, CEO of Ibhar Company Musadaq Moyaser told Qatar Tribune recently.
Mohamed Naser, a manager at Kahraman real estate firm, said:"The government has a three-phase plan to build houses for workers with a capacity of almost 50,000 beds in the next two years. This is likely to lower the demand of the cheaper accommodations."
A report published by DTZ recently estimates that the rent of residential units at the premium end of the market, including The Pearl Qatar and West Bay, had decreased by 5 to 10 percent compared with 2015 market rates.
Musadaq added that rents of houses have decreased in many residential neighbourhoods of Doha city driven by a reduced demand coupled with an increase in supply of housing units.
He further said that the demand for residential accommodation in areas such as The Pearl-Qatar and West Bay has gone down in the last few months due to a decline in oil prices which has led to less recruitment of personnel in higher salary bracket by several governmental institutions and companies.
"Some companies are even offering accommodations at heavily reduced rates for the first few months to attract tenants to apartments in West Bay and the Pearl," Musadaq claimed.
However, Naser said the decrease was not visible in areas such as Al Saad and Bin Mahmoud, which are popular among the middle-class residents, adding that rents have stabilised in these central neighbourhoods in recent months.
"Last year saw an increase in demand for both apartments and villas in areas such as Ain Khaled and Muaither, where buildings are being leased at lower rents compared to the rents in central neighbourhoods," Naser added.
A customer service officer at Ezdan real estate said the company is offering"competitive discounts in rents for its compounds in the suburbs of Doha city and Al Wakrah to attract middle class workers".
For example, the customer service officer said,"We have decreased the rent of one bedroom flat in Al Wakrah from QR4,200 to QR3,800."
Real estate market rates in residential areas in Qatar have been driven by a rapidly increasing population in recent years. Last December, the population reportedly witnessed a 7.6 percent year on year increase.
According to the DTZ report, a significant portion of new residents in the country are low-income construction workers. This has accelerated the demand for low-cost labour accommodation rather than high-end or mid-sector housing facilities.
"The recent rise in oil prices, buoyed by OPEC's agreement in November to cap oil production, has restored some economic confidence to the Qatar market following a period of uncertainty," the report added.
The DTZ report further stated that it anticipated an increase in demand for apartment and villa units. However, it is unlikely for rents to increase again in the short term owing to a fresh supply of housing units that are likely to enter the market soon, the report said.