Although, Qatar has started offering freehold property ownership rights in specific areas, local investors still prefer selling and buying land plots over finished construction projects. As people are not investing in the in real estate construction projects, asset market is experiencing shortage of residential property units available for sale and rent. After being selected to host the event of FIFA World Cup in 2022, the gulf country is experiencing the worst shortage of housing units. Having observed such situations, developers and investors have started several projects. Whereas, construction cost in the city is significantly higher as compared to other neighbouring city. Higher land prices are the primary reason of the rise in cost. It is expected that rents will continue to rise in coming years, as long as the market does not meet the rising accommodation needs in the city.
Why Qatar is the most expensive GCC country?
A survey carried out at the beginning of this year, reported Qatar to be the most expensive GCC country for construction. The company conducting this survey also predicted several other reasons that indirectly take part in rising construction prices in the city. These factors include currency rate fluctuations and rising prices of goods and services. According to their report, Qatar is on the top after ranking at 16 among UAE on 19 and Saudi Arabia on 20th position.
Why it is difficult to find Qatar rental property?
After observing the hefty rental hikes of 10 to 20 percent, most of the landlords started rising existing rent as soon as the tenancy contract ends and tenants are looking to renew the contract. They have to accept these rent rises as there are no affordable alternates in the market. The primary reason of this shortfall is the unavailability of fresh supplies of property units across the city. The slow process of land allotment also puts construction work on hold. Latest data revealed that land plots have become so expensive, making property extremely expensive in the city. Even in some areas, one bedroom apartments are being sold at QR1m. Moreover, many landlords do not agree to rent their housing unit to multiple tenants, which may also result in shortage of rental accommodation. It is not possible for everyone to lease residential property as such higher rents. Such conditions make asset market static as new customers are unable to enter the market. Also, existing customers don’t consider relocating from one apartment to another housing unit.
Negative outcomes of rising rents
The scarcity of affordable accommodation options and fast increasing rents also discouraged expatriates to settle down in the city with their families. This also significantly decreased number of new professionals joining in major sectors of oil and gas. Experts predicted that any increase in demand in the future could create a further shortage of accommodation units and lift up the prices that will make accommodation more expensive. The higher rents forced expat families to share apartments, as there is no other option left for them. As long as sharing accommodation is not illegal here, tenants are practicing to execute their needs. However, the situation could be worsened if authorities implement a ban on sharing lodging space.
Rising property rents, lesser availability of accommodation units and higher construction cost have made it difficult to put a rental cap to control rents. Authorities should find strategic solutions to control the real estate sector in Qatar.
This above information is based on actual rental property stats of Qatar; you may be interested in properties for rent in Doha? If then contact Listaproperty website for further details.