As residential rent continues to climb in Qatar, an increasing number of employers are looking to cut costs by offering their staff housing allowances instead of company-provided accommodation, a local real estate expert has said.
The move is likely to cause short-term frustration for some of the affected expats, as many residents say allowances fail to cover the actual cost of housing in Qatar.
But Edd Brookes, the general manager of commercial real estate firm DTZ Qatar, said tenants may benefit from the shift in the long run.
According to Brookes, many landlords are currently sitting on large blocks of vacant units in hopes of leasing them to a single company.
As fewer firms sign for these bulk rentals, more flats and villas should enter the market as building managers become more willing to lease to individuals, he said.
For example, there are thousands of new homes planned or in various stages of construction in and around Doha, particularly in large-scale development projects such as Lusail, Msheireb and the Pearl-Qatar.
Speaking to Doha News on the sidelines of last week’s Cityscape real estate conference, Brookes said the shift could also lead to better property standards:
“Where you have individuals (leasing units), they’ll tend to have a stronger voice and not be so tolerant as a (company providing employee accommodations) who might be more remote,” he said. “If you have an individual in there … it will be in the landlord’s advantage to make sure their facility management services are good.”
Not keeping pace
While specific figures are hard to come by, Brookes estimated that currently, Qatar’s rental real estate market is more or less evenly split between individual renters and employers leasing accommodation for their staff.
However, many local companies – particularly those in the oil and gas industry – are looking to cut costs by getting out of the real estate business and giving employees housing allowances instead.
Brookes said this trend is appearing in the form of companies subleasing their residential units as employees turn over.
Incoming staff are given housing allowances rather than the vacated unit, which companies lease out to others for the remainder of the term in an attempt to recoup some of their costs and save money down the road.
But with residential rent rising between 5 and 10 percent over the last six months – a trend that DTZ expects to continue through the remainder of 2015 – some Qatar residents say their housing allowances are failing to keep pace.
This week, a study of salaries in the Middle East and North Africa (MENA) by online recruitment company Bayt.com and market research agency YouGov found that 85 percent of Qatar respondents said they felt the cost of living in this country rose during 2014.
However, more than a third (38 percent) said they did not get any increase in their salaries during the year to compensate.
Of those who felt their daily costs had gone up last year, more than a quarter (27 percent) said their expenses had increased by more than 20 percent.
Higher rent, food and utility bills were the key reasons for the increased costs, respondents said.
Would you prefer to receive a housing allowance or accommodation from your employer? Thoughts?
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in a country where you have zero job security, or can be made instantly redundant why would you not want your house and liabilites to come with the job ?
You are right. I find it incredible that some lunatics have bought apartments in the Pearl.
Haha so many of them and in zig zag towers. They swallowed the promises abs lies and now they are paying for it
The owners/landlords can afford to allow their properties to lie vacant here. The real estate market here is not comparable to Australia, Canada, US or UK.
Once acceptable accommodation is no longer provided by my employer, I will leave.
Exactly. Landlords with more money than God will just wait it out or still charge the same high rent. I agree that I will not stay if they do that to us. It’s hard enough to save money as it is. I didn’t come here to earn just to live. I can do that at home surrounded by family and friends and the comforts of non 110*F days.
Do it, just go back.
Now was that a constructive response? I in no way insulted anything or anyone. Just stated the facts as I see and would do. NO need for snide remarks.
And you go to your landlord and tell him that rents are too low and you would welcome another rent increase.
Deleting for attacking.
It’s an “attempt”. Once the companies understand that qualified people will refuse to come they might have to change their decision again. They do this here all the time because they have no clue about economics.
BTW my employer has not provided ANY salary increase in 10 years
10 years without a pay rise and you are still there?
Has your employer increased your allowances or paid you bonuses or something?
i guess the irony of it all is that lots of company do not issue No Objection Certificates, thus it is exit go other countries for better package or wait out the ban to get back. Some actually manage to get better offers but when they show this to their present company the policy is no NOC issuance.
Yes same as my case 8 years without adjustment but newer employees are hired for better pay.
Before also our company maintains villas but have started to give allowances only its 1500Qr ever since 2006.
This will affect westerners more than Asians. Westerners if it starts to cost to live here will just leave, go somewhere else or go home. Asians will suffer in silence generally as it is still better than the countries trey came from. Standards will dive even lower than now and the major companies in a few years will up the money to attack westerners back. The cycle continues….
Arabs are staying, even if they end up working for just food and shelter. Who wants to go back to Iraq, or Syria, or Egypt, or Libya, or Lebanon, or Yemen, or, or, or…
Most of the Indian families are sending their children back home cost of schools in qatar high, staying rent is high, food and eatbles are gone up etc
It’s surprising to find so many people taking this news so negatively. Nobody has said that the employees will not be provided for their housing. All the news suggests is that instead of providing actual housing, companies provide you the Housing Allowance. The debate can be whether the allowance is sufficient or not. But in either case, the employee gets the flexibility to chose a place of his/her own. I, for once, will like to live in a different place than where the company has put me in. In many places in the GCC itself, including Dubai and Abu Dhabi, companies pay housing allowance only, with very few of them going for physical housing.