Rents to increase by 20 percent; Massive real estate sales recorded.
Qatar’s year-on-year rent inflation was 6.2 percent by end-October, according to the latest release by Qatar Statistics Authority. Increasing population and lack of housing units are the primary reasons for the rise in rents in Qatar – a trend that will continue at least for the next 1-2 years.
JustHere spoke to real estate agents in the city on the increase in rentals, which some like Sebastian of Wizard Properties feel will go up by 10-15 percent in the coming months (see rent table below).
“The current increase in rent stands at 5-10 percent,” he says, estimating that Doha is short of 100,000 units of apartments at the moment. There are many housing projects coming up, and once these projects are complete, rents are likely to come down, he says.
Popular residential belts are seeing a higher increase. “Rents in premium apartments are being raised by 20-30 percent, particularly in Al Sadd and Bin Mahmoud area. Al Sadd is a hot location right now and the average rent there is QR8,500 for fully furnished apartments,” Sebastian said. While the average rent for a fully furnished 2BHK in Doha is QR7,000, irrespective of area.
“Villas won’t be affected much because they don’t have a standardised benchmark…therefore there can be no exact forecast for their rents.”
“Capitation is increasing by 30 percent. Properties on C and B ring used to be sold at QR100 per sq mt, which is now being sold at QR150 per sq mt… some are even selling property at QR180 per sq mt,” he says.
“Earlier a two bedroom apartment in an area like Mathar Qadeem would be available at QR4,500-5,000 but now it’s shot up to more than QR6,000,” Sebastian said.
Major increase in real estate transactions
A few days ago QNA had published that for the week ending November 14, real estate sales worth QR1,244,246,627 was registered; the highest recorded in recent months.
The numbers are calculated based on the real estate sales contracts registered at the Ministry of Justice.
The main sales were: open plots of land, two floors villas, annexes, houses and residential buildings which are located in the municipalities of Umm Salal, Al Khor, Doha, Al Rayyan, Al Shamal, Al Daayen and Al Wakra.
These are also the areas that several Qatar residents opt for, to escape the high rents of Doha.
An agent from Al Asmakh Real Estate corroborates Sebastian. “There has been a 10-15 percent increase in rents since last year, and in future rents will go up by 20 percent,” he said. He also added that because Al Sadd, Bin Mahmoud and Al Nasser are in demand they would be the most affected areas in terms of hikes in rents. “Demand for these areas is very high as it has easy accessibility from all areas in Doha,” he said.
Also apartments in the West Bay area will face higher increase than other areas.
He also believes that there will be steady pricing in a year or two as construction for housing will be complete. “Hopefully rents will then stabilise,” he says.
“Villas won’t be affected much because they don’t have a standardised benchmark. Each villa or a villa complex differs from the other. Many factors go into pricing rents for villas – location, whether a villa has provision for a maid’s room or a driver’s room, the interiors of the villa, parking space and so on. And therefore there can be no exact forecast for their rents.”
In October, Barwa Housing complexes – which were meant to provide houses with advanced utilities, limit inflation and mitigate the housing crisis and high rents – also increased rents by 10 percent for its units at Al Sailiya and Mesaimeer. The monthly rent for two-bedroom units have increased from QR3,300 to QR3,630 and that for three-bedroom units from QR3,850 to QR4,235 since October. Their reason to hike rents was ‘to meet the maintenance operation’.
A brief period of stable rentals
In June, Qatar National Bank (QNB) had stated that it had forecasted some further increases in rents due to ramp up of several major projects over the next year or so, resulting in slightly higher inflation at 3.6 percent in 2013 and 3.8 percent in 2014.
Highlighting that inflation in Qatar has accelerated this year as influx of expatriates has driven up prices, QNB said rental inflation reached 6.7 percent in the year to June 2013, having been negative almost every month from early 2009 to mid 2012.
A report prepared by Al Asmakh Real Estate for realty investors states that increasing population and lack of adequate supply of new units generates higher demand for residential houses especially within Doha city limits.
“The overall outlook of residential real estate market within Qatar looks potential in forthcoming quarters. Demand for well-maintained buildings will continue to be the top of the segment. Development of further villa compounds would be call of the future. Short-term capital prices and rentals are expected to soar further by 3-5 percent Quarter on Quarter for properties located within Doha city limit and connected peripheral areas. However, properties located in other municipalities may remain unchanged due to distance from the city center and business districts.”
|Areas||Bedrooms||Current average rents|
|Mansoura, Muntazah||2BHK Semi furnished||QR 8,000|
|Al Saddd, Bin Mahmoud||2BHK Fully furnished; 2BHK Unfurnished; 4BR Villa||QR8,500QR; 5,500-6,500; QR14,000-15,000|
|Al Hilal||2 BHK Semi furnished; 2BHKUnfurnished||QR7,500; QR5,000-6,000|
|Airport Road||2BHK Fully furnished; 2BHK Unfurnished||QR6,500; QR5,000|
|Bin Omran||2BHK Unfurnished||QR5,500|
|Ain Khaled||2BHK Unfurnished; 4BR Villa||QR5,500-6,500; QR12,000 onwards|
|Al Gharraffa, Al Rayyan||2BHK Unfurnished||QR5,500|
|Al Waab||4BR Villa||QR15,000|
[Photo courtesy: Jan Smith, from Flickr]