Browsing 'rent' News

Brian Candy/Flickr

Al Sadd neighborhood Brian Candy/Flickr

The cost of renting a home in West Bay, Al Sadd, Bin Mahmoud and the Pearl-Qatar fell by thousands of riyals a month last year, a new real estate report said.

This was due to dropping demand and an increase in available housing units as a result of lower global oil prices, DTZ said in its Q4 2016 property report.

After a population boom in Qatar caused housing rent to surge in Doha for several years, layoffs and belt-tightening caused things to change in 2016, the report said.

Dan A'Vard/Flickr

Photo for illustrative purposes only. Dan A'Vard/Flickr

Now, more residents are looking for better deals as more employers opt to offer allowances instead of taking out corporate leases on properties.

Some people are even relocating to good-quality, lower-priced housing options in “peripheral suburbs” such as Ain Khaled, Abu Hamour and Muaither.

Commercial real estate

Meanwhile, prime office rents fell by an average of 10 to 15 percent last year, as more properties came online and demand dropped.

However, just as with residential rents, commercial real estate recovered slightly in the fourth quarter of 2016.

Gold Bay Real Estate

Marina Twin Towers in Lusail Gold Bay Real Estate

This rally would “need to be maintained to avoid market oversupply levels in 2017 and beyond,” DTZ said.

But this looks unlikely as the entire QP district is expected to be completed this year, adding 230,000 sq m to West Bay’s supply.

And several office buildings in Lusail are also due for completion soon, adding some 134,000 sq m, DTZ said.

Hospitality struggling

Finally, with 1,800 hotel rooms and apartment hotels coming online in Qatar last year, competition has been fierce in the hospitality sector.

Falling tourist numbers in 2016 caused occupancy rates to drop to 61 percent in the first nine months of 2016, down 14 percent from the year before.

AlRayyan Hotel/Facebook

The new AlRayyan Hotel Doha Curio – A Collection by Hilton (next to Mall of Qatar) AlRayyan Hotel/Facebook

“In order to maintain, or improve hotel performance measures, Qatar will need to place a heavy emphasis on the development of the tourism industry in the coming years,” DTZ said.

Officials are working to woo more visitors through cruise tourism, various festivals and by making it easier for more people to secure visas to enter the country.

Thoughts?

Russell Bond/Flickr

Photo of Al Sadd for illustrative purposes only. Russell Bond/Flickr

Apartment rents in popular central Doha districts such as Al Sadd, Bin Mahmoud and Al Mirqab are finally starting to come down, according to a new real estate report.

Some properties are now up to 10 percent cheaper than last year, saving tenants between QR500 and QR1,000 a month.

The change comes following an exodus of people from Qatar earlier this year, DTZ Qatar said in its Property Times report for Q3 of this year.

Additionally, in recent months, more “affordable” apartments have convinced residents to relocate to areas like Ain Khalid and Muaither.

The report added:

“The increasing provisions of ‘affordable housing’ on the outskirts of Doha is putting pressure on landlords in more central locations to provide more flexible lease terms for vacant units.

Many (are) offering apartments and villas at rents that are between 5 percent and 10 percent below what would have been achieved in 2015.”

Fewer people, more supply

The DTZ quarterly “snapshot” highlights trends in the residential, commercial, retail and hospitality sectors in Qatar.

Overall, the months of July, August and September this year showed a similar picture to the previous quarter, particularly at the luxury end of the residential rental market.

Tim Hatton/Flickr

Qatar Quartier Tim Hatton/Flickr

The launch of more apartment blocks, especially on The Pearl-Qatar, plus a swathe of white-collar workers leaving Qatar means that the price of renting a villa or apartment in West Bay, The Pearl and Al Waab remains around 10 percent cheaper than last year.

However, there has been little movement in rents between the two quarters, Johnny Archer, associate director of research and consulting at DTZ Qatar, told Doha News.

The average five-bedroom villa in Al Waab currently rents for around QR18,000 or QR19,000, while a three-bedroom house is still about QR14,000.

DTZ Qatar

Excerpt from DTZ Q3 2016 Property Times report DTZ Qatar

Meanwhile, a three-bedroom apartment on the Pearl will rent for around QR16,500. And tenants can get a one-bedroom property on the island for approximately QR10,000, DTZ figures show.

Nevertheless, the market could pick up in 2017, Archer said.

This would come on the heels of recent announcements by Sidra and Hamad Medical Corp. (HMC) to increase staff numbers in the coming year, plus Qatar’s energy ministry’s statement this week that the worst of the oil crisis is over.

“We are hopeful for 2017. There seems to be more stability in the oil and gas sector. It seems that the redundancy programs are behind us,” he added.

However, an uptick in demand is unlikely to translate into rent increases again in the coming years, the report states.

This is because more accommodation is likely to be added to the rental market in the run-up to 2018.

Office construction

The report also said that office rents over the summer continued to be down around 10 percent from last year.

This is due to ongoing “subdued” demand for space from hydrocarbon and public organizations, DTZ said.

Mohammed Zuber Shaikh/Flickr

Photo for illustrative purposes only. Mohammed Zuber Shaikh/Flickr

These two sectors occupy up to three-quarters of all commercial space in prime locations such as Dafna/West Bay, but government cut-backs have caused a “significant fall” in demand for office space.

As such, around 17 percent (300,000 square meters) our of the area’s total 1.63 million square meters of office space in the area was up for lease in the last quarter.

When it opens, the QP district is expected to add an extra 200,000 square meters to that. However, when it will come onto the market is not yet know, the report noted.

Oversupply has translated into cheaper rents for companies in the business district:

“Quoted rents have, on average, reduced by between 10% and 15% for most buildings in West Bay, as landlords compete for tenants,” the report states.

That said, commercial building projects are continuing apace around Qatar. The nation is expected to see 2 million more square meters of space in the coming decade.

DTZ Qatar

projected office space in Qatar DTZ Qatar

This will be concentrated in Msheireb, Lusail Marina, Energy City in Lusail and West Bay.

The report concluded:

“In DTZ’s opinion this is likely to increase vacancy rates, and potentially lower rents, unless there is significant uptake in demand from both the public and private sectors in the next five years.”

Thoughts?