House rents in Qatar expected to drop by as much as 30% soon
Everyone knows that there is low demand and an oversupply of residential units in the market at present.
While real estate companies have refused to blink so far, industry experts feel they will have to give in sooner than later and decrease rents, reported The Peninsula.
So far, companies have refused to reduce rents and instead come up with schemes like ‘live rent-free for the first six months.’ This has helped them retain some tenants ands survive in the market.
“Supply of housing units has surpassed the demand. Owners of buildings will have to reduce rents by 20 to 30% due to low demand,” said Khalifa Al Maslamani, a Qatari real estate expert on a popular talk-show on Qatar TV.
He pointed out that it is economically sound to reduce rents to attract customers than keeping the units vacant.
He suggested that an apartment being rented out at QR8,000 per month should be made available at QR6,000. And rents in high-end category properties, ranging from QR20,000 to QR25,000 per month, should be slashed to QR15,000 to QR16,000.
Abdul Rahman Al Najjar, Deputy CEO of SAK Holding Group, said they were not decreasing rents, but coming up with new plans to make the most of the situation.
“We’re not competing with our rivals in reducing rents . However, we do offer free occupancy for two, three and in some cases six months. We’re also competing in providing better services.
“The rents have declined significantly in various areas. These days, there’re no more increase in rents like it used to be in the past,” he said.
Falling oil prices have had a huge impact on real estate properties. Land prices have fallen by about 25 to 30 percent in general and up to 50 percent in some areas.
The least affected is the residential segment with a fall in rents by about 15 to 20 percent. Rents of office spaces have fallen by about 50 percent due to over supply.
Mohdata:
Q: If you are stranded on a desert island with Adolph Hitler, Atilla the Hun, and an estate agent, and you have a gun with only two bullets, what do you do?
A: Shoot the estate agent twice.
I hope all the agents and middle men get their backs broken soon...ive never dealt with them but have seen them rip off my friends and others in need, in the most greedy ways...I hope they get into some real trouble of their own as payback for all that they've done to others... To all the people currently looking for a place, I advise you to not entertain these brokers and just look for the non commission ads... There are plenty of options and there is no need to give in to their greed... All it needs is a little more effort...
No No.... May be that Means more partitioned rooms.... So i guess it will be partition inside partitioned room.
olaaaaa! means even commissions will drop? lol!
Brit: how did you know I am in the penthouse? will invite you & Rizks - we'll have shisha and the tea from Rizks... :)
These are inaccurate information. It's true that some parts and areas have dropped, but not more than 15% and only dropped because they are owned by 10-15% of landlords / expats / investors who have existing bank loans and need money to pay them off. Rent market is still unclear, a number of landlords are still not agreeing to reduce the price and will never agree.
zafirah: Damn .. I was waiting for an invite to a housewarming in your new penthouse :0(
The same we talk for more than two years. yet , none of the real estate agents are ready to bring down the rental. Unless until our ministry come to fix it, this drama will exist.
soon is NOW Brit... the Real Estate Company where I am renting sent me the renewal notice with a reduce rate of 15% - so that I will stay... :)
How long is soon ?
How about the "Shops Rent"? Those are still riding high and further going up, due to acute shortage and monopoly of shops realtors.
This is what is defeating the Govt's business diversification plans from oil to non oil businesses.
Low rent "Shopping Villages" are compulsory to diversify and boost the small and medium businesses thereby helping the country to avoid business down turns when the oil is in lesser demand.