More high-end housing options in Qatar are expected to become available in the coming year, but homes geared toward middle-class families will continue to be in short supply, real estate firm DTZ has said.
In its latest report, the firm said that more than 700 new units in Porto Arabia on the Pearl-Qatar are set to be handed over to homebuyers early this year, adding new supply to the nation’s strained housing market.
The three new towers – which DTZ said likely still need to be approved by Civil Defense before they can be occupied – are part of Qatar’s growing stock of luxury homes, which is increasing at a faster rate than the supply of mid-range residential accommodations.
These market dynamics mean middle-class tenants are likely to continue facing rent increases above the rate inflation in the coming months, DTZ said. Johnny Archer, the associate director of DTZ Qatar, added in statement:
“With Qatar’s population growth set to increase by over 7 percent per annum in the coming years, the real estate market will need to expand more quickly to keep pace and avoid overheating the market.”
More affordable homes needed
The real estate firm said developers are constructing an inadequate number of affordable homes to keep pace with demand. DTZ highlighted family accommodations – namely four and five-bedroom villas – as in particularly short supply.
The firm estimates that the number of prime residential units, such as those located in the Pearl-Qatar and West Bay/Dafna, would increase by 40 percent over the next 12 months. By comparison, the number of homes geared towards middle-income residents is anticipated to grow by 12 percent.
The DTZ report is the latest bit of grim news for tenants in Qatar who are seeing rental costs consume an ever-growing share of their monthly income.
Late last year, another real estate firm – Colliers International – found that the average expat household in Qatar is spending more than a third of its annual income on rent. That suggests that the city’s housing market is becoming unaffordable for many residents.
Like DTZ, Colliers concluded that developers are not building enough low and mid-cost housing to keep up with Qatar’s rapidly expanding population.
Anecdotally, many residents say they are facing steep rent increases as their leases turn over. Last week, tenants in The Park Residences – a neighborhood within Barwa City – told Doha News that their rent would be going up by thousands of riyals a month as their landlord phased out the promotional rates used to attract initial residents to the new community.
And officially, government statistics show that rent rates – which are lumped in with fuel and energy prices – increased 7.3 percent year-over-year in December.
Hotels to be ‘tested’
Other highlights of DTZ’s report include:
- The supply of office space in West Bay and Lusail is set to jump 18 percent, or 300,000 square meters, to approximately 1.94 million square meters by the end of the year. While no specific buildings were mentioned, the World Trade Center Doha – which reportedly contains nearly 142,000 square meters – appears to be nearly ready for occupancy. DTZ said that government-related entities have been responsible for most of the leasing activity over the last year and that the new supply will push vacancy rates above the current 9 percent;
- Despite the strong performance by Qatar’s hospitality sector in 2014, local hotels will be under pressure in the coming years as some 4,000 new rooms hit the market in 2015-16. Occupancy levels are likely to be “tested” in the medium term as new hotels are constructed to meet the country’s obligations to build tens of thousands of new hotel rooms ahead of the 2022 World Cup;
- There are nine malls currently under construction that, once completed, will nearly triple Qatar’s current supply of 590,000 square meters of retail space.
Here’s a copy of the full report:
Thoughts?
“going up by thousands of riyals a month as their landlord phased out the promotional rates used to attract initial residents to the new community.”
There was no such things as promotional rates!!!
The main reason for our rental increase, which is 50% in my case, is the lack of laws to protect the tenants from the landlords’ greed. Many families will end up on the streets.
Qatar Authorities, we need your help.
50%? Seriously? Thank God my landlord is much more nicer than yours 🙂
They made us the guinea pigs by renting and filling up the apartments, when there was no one to take them. Now, they have eyes only for money.
Blame the Indian n Egyptian managers who advise local businesses how to make a killing when the going is good. They r laughing all the way to the bank.
Some people are making a fortune out of being in the ‘property business’ in Qatar. Perhaps this is where your rental increase is going?
http://www.dailymail.co.uk/news/article-2942838/The-supercar-addict-Millionaire-Qatari-businessman-26-owned-Bentley-Ferrari-drives-270-000-Rolls-Royce-Ghost.html
In both the business he is engaged in, people can expect the reasonable or the ridiculous….good inheritance.
Had the local business owner got this advice from a manager other than Indian & Egyptian, he would have not opted for the killing profiteering ??
Is that fact or conjecture?
Usually are…but then add Lebanese Sudanese Palestine…etc…They know all loopholes in the law to profiteer..
Deleting for singling out nationalities for no reason.
Regret.. it was not intentional..but by numbers they make the majority. Essentially wanted to say tht its the expat managers in most cases who undercut expat salaries and benefits…
I really cannot see their basis on these ever growing rental rates! What? They just “feel” like their rates should increase?
Actually there is a law, that only 10% can be increased annually
Nope. That law was taken out on residential properties a long time back.
There *was* a law about residential rental increases. That law lapsed years ago and the government never renewed it.
There is still a law limiting the rental increase of non-residential property, but there is no limit whatsoever for how much your landlord can increase your residential rent.
Currently this only applies to commerical properties, no such protection for residential
So happy to see that this is being reported on. Given that the vast majority of workers here are middle-income, it’s important to be able to accommodate them as well. Thank you.
If you cant afford to live in Qatar, you wont stay. Simple. People come here to make money for their future, not just hold body and soul together. There must be more properties built for those middle income families with rent controls. Rent plus school fees and transport is a killer combination, making Qatar less desirable than it was 5 years ago.
Non regulation of businesses and laxity in rules results in consumers and tenants being taken for a ride. With less and less of savings here, expats will soon look elsewhere in GCC.
Soon?
Tomorrow 🙂
We need to stop calling the Pearl “luxury”
Shhsss it falls the newly landed westerners they are living somewhere great….
It is to my knowledge the most luxurious in Qatar. And pricewise it is the most expensive also 🙂
Four Season apartments have and will always be the most luxurious .. There are a few towers in west bay by the embassies I consider to be much nicer than anything in Pearl but that’s about it.. Pearl is good and practical but that’s not luxury
Absolutely spot on. Very few towers on The Pearl are genuinely anywhere close to luxury. Most are hastily built and cheaply finished. Luxury is a derivation of quality, not price.
A lot of the so called middle income people work in the private sector and Qatar doesn’t really need you. What they need is those people to keep the LNG flowing and thousands of labourers for the infrastructure projects. Both types do not need low to middle standard housing to rent.
Plus Qatar is paranoid of being overrun by millions of low to middle class Indians setting up ghettos. Try and get an Indian visa now and it’s close to impossible.
Not really. The middle class work also in the government and not all of them enjoy government housing. Moreover, most Egyptian and Sudanese for example are considered low to middle class. They consitute a big part of the white collar population here and you cannot house them in labourers camps. If you add to them Indians, Filipinos and other nationalities, that is roughly 20 to 30 percent of the population that needs to be housed in decent and reasonably-priced apartments. So is your solution for them to tell them go home Qatar does not need you? 🙂
I’m indifferent to what Qatar does as the Americans say, I have not skin in the game. As for people working for teh government they are not needed, government jobs are stuffed with Qataris. The Qataris can handle nearly all government functions.
I agree you cannot house a large number of white collar workers in labourer camps, the question I am raising does Qatar need them at all?
Great. Let’s build more expensive high-end unaffordable houses.
…..and then the house of cards built with “smoke, mirrors and a few good
Qatar, whoever that is, Qatar doesn’t give a shyte about you spending a third or all of your income on rent. If YOU don’t like it, go home!