With reporting from Elysia Windrum

As many residents may have already noticed, Qatar is becoming an increasingly expensive place to live compared to last year, and the year before that.

New government figures support this observation: In July, Qatar’s consumer price index (CPI) rose 3.1 percent when compared to the same month last year, fueled in large part by a hike in the “rental, fuel and energy” category.

The CPI is a defined basket of everyday goods and services that reflect real-time prices.

The “rental, fuel and energy” group went up 7.6 percent since the previous July, an increase the Ministry of Development Planning & Statistics attributed to ongoing hikes in residential building rents.

A similar year-on-year increase was recorded in June, and also attributed to rent, which rose 7.4 percent from June 2013.

Excluding rent, which accounts for one-third of the consumer basket (and about one-third of expats’ monthly expenditure), the CPI only rose 1.3 percent since last July.

But overall, the cost of living in Qatar appears to be rising across most categories compared to 12 months ago, including:

• Furniture, textiles & home appliances (up 5.4 percent);
• Garments and footwear (up 2.2 percent);
• Transport and communication (up 1.8 percent);
• Miscellaneous goods & services (up 1.3 percent);
• Entertainment, recreation & culture (up 0.8 percent); and
• Medical care (up 0.7 percent).

Only the cost of “food, beverages and tobacco” dropped since July 2013 – by .8 percent.

Rental rates

This week, an unnamed real estate company forecast a 10 percent annual increase in home rental rates through 2022.

But, Janet Parry, manager of Direct Real Estate, said that such a prediction is not supported by the numbers.

Speaking to Doha News, Parry said:

“The real estate agents and property managers I have discussed this matter with note they have never been requested to submit figures to support the benchmarking of the rents and predictions. Without having a wide pool to draw on for these figures it becomes purely subjective and is the personal opinion of the ‘real estate company’ contacted.”

However, Parry acknowledged that rental rates have been on the rise in recent years.

She said prices in Qatar first began going up in 2004, ahead of the Asian Games. They peaked in 2007, then began dropping. But since 2011, rents been re-started their upward climb as the population expands to meet Qatar’s needs ahead of the 2022 World Cup.

Parry explained:

“There is an influx of expatriate professionals to Doha as the 2022 infrastructure projects ramp up not just in construction but in all the supporting roles be it teachers, medical staff etc necessary to support a growing population. The demand on the existing housing stock increases, (and) there is justification in the increase in the rent due to the scarcity of the housing in demand – whether low-cost apartments or the higher end apartments on the Pearl…

Unfortunately many larger employers cut the housing allowance to reflect the drop in rents but have, as yet, not revised the allowances to reflect the current and increasing mark.”

She added that while it’s likely that rental rates will continue to climb for the next three to five years, they may not continue the pace of growth through 2022 because large infrastructure projects will wind down before then, leading companies to scale down their manpower.

Thoughts?