DTZ: Residential rents finally falling in Qatar
For the first time in nearly seven years, residential rents in some neighborhoods in Qatar are starting to go down as landlords struggle to fill housing vacated by laid-off expats, a local real estate firm has said.
“We’re in a very different country now than we were 12 months ago,” DTZ associate director Johnny Archer told Doha News. “Rents will drop. It’s inevitable. In fact, they’ve already started.”
Qatar’s overall population continues to climb due to the influx of blue-collar workers.
However, residential vacancy rates in some areas suggest that the number of middle and high-income expats is staying the same or declining as energy firms, health care providers and government-funded organizations trim their headcounts.
At the Pearl-Qatar, Archer estimates that rent have dropped from QR500 to QR1,000 a month.
A one-bedroom flat now averages around QR11,000 to QR12,500 a month, while a three-bedroom costs between QR16,000 and QR18,000 a month.
Meanwhile, mid-range areas such as Bin Mahmoud and Al Sadd have also seen rent drop by QR500 to QR1,000 a month, Archer said.
He cited lower demand, as tenants fed up with rates in popular neighborhoods found less expensive accommodations in Najma, Al Mansoura and elsewhere.
Additionally, buildings are now sitting empty in some parts of central Doha as some landlords resist renting to individual tenants in the hope that a large employer such as Qatar Airways will lease the entire property, Archer said.
However, few firms are ramping up hiring. And those who are still recruiting more staff are increasingly inclined to give their new employees a housing allowance rather than company provided accommodations.
According to Archer, some landlords are still increasing rent for their existing tenants.
But the softening market has given residents leverage, especially if they are willing to move, as other landlords reduce rental rents of vacant properties in an effort to woo new tenants, he added.
The large number of residential units under construction will also work in the favor of home-renters.
DTZ estimates that up to 13 towers in Porto Arabia and Viva Bahriya are nearing completion and could increase the number of new units in the Pearl-Qatar hitting the market in 2016 by roughly one-third over last year.
“This will add a huge amount of supply,” increasing vacancy and putting downward pressure on rents, Archer said.