Rising residential and commercial rents should be curbed for the sake of Qatar’s development and growth, members of the nation’s influential Advisory (Shura) Council have said this week.
During their regular meeting on Monday, several council members debated what to do about the high costs of real estate and rents in Qatar, QNA reports.
According to the Qatar Tribune, one main concern for some members was that the increasingly expensive price of real estate makes it difficult for Qataris to buy land to build houses for their children.
The members suggested that the government hand out more parcels of land to encourage more construction. The council also decided to refer the issue to a committee for further study.
Hot market
Last year, Qatar’s residential rents were increasing at their fastest pace since 2008. That growth has slowed this year, but housing still continues to be one of the biggest drivers of inflation.
The last time rental rates were this high, the government stepped in, imposing a two-year moratorium on rental rate hikes for most residential leases.
In addition to the Shura Council, other authorities have also called for rent controls. Last year, a member of the Central Municipal Council said a law is needed to cap rental increases at no more than 10 percent every two years.
However, while rent control measures provide relief to tenants in the short run, they could exacerbate prices in the long run by discouraging investors and developers from constructing new homes.
Elsewhere in the Gulf
Other cities in the GCC are also grappling with a shortage of affordable housing.
To help cope, Saudi Arabia’s Shura Council recently backed a new tax on undeveloped urban land in an effort to encourage development.
The hope is that if land is more costly to hold, the government can “stimulate the creation of appropriate housing at appropriate prices for all citizens,” Housing Minister Majid Al-Huqail, told the Saudi Press Agency, according to Bloomberg.
Saudi’s housing ministry estimated that roughly 40 percent of Riyadh was sitting empty, as land is frequently used as a way to store wealth, the newswire reported, adding that many Saudi developers earn more on trading land than building on it.
Some real estate experts have called for similar measures in Qatar, where the rapid increase in land prices has caught the attention of the International Monetary Fund.
Hamad Al Hedfa, CEO of developer Mazaya Qatar, told Arabian Business that part of the problem was much of Qatar’s undeveloped land had been inherited by individuals who lacked knowledge of the real estate industry, had minimal interest in the building sector or simply speculated that they could make more money by holding onto it.
Al Hedfa added that one option would be for the government to force landowners to trade their vacant urban sites for rural plots if they refuse to build.
“If an owner has land in Doha it has to be developed, otherwise you give him land somewhere out of Doha. It has to be bigger but smaller in value, this way you can create a new market,” he was quoted as saying.
Thoughts?
