Rents or Dents
Although the skyrocketing rents in Doha topic has been discussed quite often. I want this to be addressed again from a different outlook, especially after 2 articles that came in the gulf times today.
Is there any chance in hell that the rents will come down after the Asian games? As the reporter has pointed out “economists and experts dent their hopes with postulations that the current situation is not event-specific ". So where is this leading to, most of us are under the impression that rents will come down after December...but will it?????
Legislation has come out with regards to rents but the enforcement of the law seems to be very lenient and there are literally hundreds of villas and apartments empty and not rented out around Doha, all for what????????? The Asian Games , then what????
I just get a feeling that this might be a long term strategy by the government to get rid of the old including the people and bring in the new… it’s a thought and looks real to me…….
You're forgetting the most important thing here. And that is if I have to continue living with my parents because I can't get an apartment and my company can't find one for me than I will go on a killing spree. :D
The question of blue-collar labor is being raised at all levels of the GCC. The majority of these workers throughout the Gulf have always lived bachelor lives with their families back home anyway. There have been numerous ideas put forward including not allowing a stay of more than 6 years for foreigners.
I haven't seen any statistics but I think a demographic change is being effected in the Gulf with rising rents the driving force behind it.
As for white-collar workers in the third bracket you classified things are becoming increasingly difficult for them. But as long as there's an oversupply of these workers back in their homeland they will continue to come and take up jobs in the Gulf as long as that's possible.
Without the governments of these workers setting a minimum standard before allowing workers to travel and take up jobs this situation will not change. And the governments won't because they're a source of hard currency remittances.
I think you are exaggerating about the increased social problems. Yes they exist, have existed and will always be around but the overwhelming majority of these workers as I said before are living bachelor lives here anyway. If you imply that there will be an increase in rapes, peeping-toms and other criminal/deviant behavior I disagree.
The increase in crime Qatar is seeing is mostly related to credit-card fraud, high-take robberies and drug and alcohol-related issues.
Not too long from now Q-Tel will cease to monopolize the comm sector in Qatar, and last I heard you can still use messenger services like Yahoo to communicate so the situation is not as bleak as you put it.
Perhaps you are transferring your own frustrations and applying them to the whole situation.
It was reported in Gulf Times that many Indian parents are hesitant to marry their daughters to Indian men working in Qatar in view of the high rental costs. Their fear is that the prospective son-in-law will not be able to find a suitable accommodation for the daughter or the couple-to-be may be forced to stay separately
after their marriage.
It was also reported that Indian parents in India prefer to marry their daughters to men whom are returning to India from the US to work in the booming IT Industry, instead.
The super high rentals have also forced many expats to send their families back home as they can no longer afford to pay for one-family accommodation. The tendency is to share a room....it was reported that there are also cases of 10 people sharing a room !
With all these trends happening now, we could see in the near future most Expat men in Qatar are either Single or Married but on Bachelor status. The question is, how can the Single men remain Single, forever and ever ? If we go a little wilder, how can then these Expat men (either Single or on Bachelor status) fulfill and satisfy their sexual needs and desires ?? Sharing a room by 10 people also has led to increasing number of fights amongst the occupants, as it was reported.
The same Gulf Times also reported that QTel has been blocking some chatting websites as some of the Users have been misusing the websites to make cheaper International Phone Calls. QTel claims, if they don't block these websites, they will lose significant income and could affect Qatar economic growth in the long run.
Even Yahoo Messenger is being blocked intermittently, as reported.
The question again, is this, Expat men will be forced to stay Single or on Single status due to the high rental costs, with their families sent back homes, Expat men will need to make regular phone calls to keep in touch with family members, and they have no choice but to use QTel paid lines. Either way, Expat men in Qatar are caught.
If we can predict the future, what will be the social repurcussions on these increasing number of Single Expat men, how will they find alternative means to fulfill their sexual desires, how by being on Single status will affect their motivation at work and spiritual well-being, etc etc.
Won't the super high rental costs then force Expats not only to leave this super rich Country (in 2005, Qatar annual income per capita is QR 157,000) and at the same time lead to other social problems too ??
The doha stock market slowed down dramatically in the past few months because a lot money went into construction instead. The boom is mainly feuled by the Asian Games and the new LNG/GTL plants in the north. Many expect the contruction in doha to slow down after the asian games, though it wil continue for couple more years in the north.
Many aparments, villas and compounds will be finished perhaps mid next year. The current prices are not sustainable at all so as demand decreases, expect the rents to go down but it will happen slowly.
The doha stock market slowed down dramatically in the past few months because a lot money went into construction instead. The boom is mainly feuled by the Asian Games and the new LNG/GTL plants in the north. Many expect the contruction in doha to slow down after the asian games, though it wil continue for couple more years in the north.
Many aparments, villas and compounds will be finished perhaps mid next year. The current prices are not sustainable at all so as demand decreases, expect the rents to go down but it will happen slowly.
Very well presented Noble man...As usual the cynic in me wants to contribute..Specific to your point:
PART I: Categories:
"People in the Third Category .........from certain specific countries."
There is a fourth Category of people coming from within the first and third category ...People who have a compulsive obsession of coming to "Gulp"...This category of people are "inspired" by the regular TV features of "Success story" of their "compatriates"...Not coming here is an "inadequacy"..Its not about economic sense...If you notice both the articles are focused on "such people"..Living in the Gulf is a given..its not an option driven by comparative study of wages and oppurtunties...So much so that now other "states" are fulfilling the demand of manpower at that state at "higher" prices than that are available in the gulf....but as I said.....(For political correctness I have not got into specifics..So its possible you may not understand my contribution..)..
So indeed its a free world.. But what if its about mindset?...not economics..
Offcourse there are loads of Category 2 guys too from the "state"..but then they are smart guys and certainly its a free world for them...
PART II: Reason for Rent increases...
This one is exactly similar to Dubai...Qatar is not a free market..its a small closed country..and market can be manipulated by major players in the construction industry(Not Govts..but major Real estate players)...
1. If the idea is to "force" people to buy real estate in the expensive developments..the only way is to match rents to EMIs....(Equated Monthly installments)
2. Supply and demand are what the "agent" tells you.. not what it acutally is..depending on the "rate" he has purchased the development on "yearly rental"..
3. Will it work for ever?? NO..it is on a downward slide in Dubai...Rentals are ever increasing despite additions of thousands of dwelling units every year..Reason?? Those who purchased the properties expecting smart returns are not finding buyers..and distress sales are discussed now...
People's capacity to pay higher rentals have reached a breaking point..so loads of people are leaving Dubai..
Conclusion of long piece: Rents will increase as long as the Govt. props up rates by paying higher housing allowances to Category 2 guys and Estate agents are able to "tolerate vacant properties due to high differentials"..This wont work for ever as Dubai has discovered at the high cost of "loss of quality manpower" and "ghost buildings".
Expats that come to Qatar for a living can be generally categorised into 3 categories :
1. Those who earn QR 1,000 or less a month (mostly the construction workers and the cleaners)
2. Those highly paid expats, earning a total package of at least QR 15,000 a month and more (mostly engineers and professionals in the oil & gas industry)
3. Those earning in between the 2 categories
Those in category 1, they came here for the hope of a better life without even knowning how Qatar looks like, or even zero knowledge on Qatar's costs of living.
After arriving here, they may find that greener pasteurs are no longer green, and they may have the biggest regrets in their whole life. But for this category of people, what choice do they have....the best they could do is may be to approach their relevant Embassies with the hopes that their diplomats countrymen could do something for them. But how many complaints have really been addressed?.. I have read in newspapers the other day that the Nepalese Embassy official is appealing for donations for the Embassy's Welfare Fund.
The fate of people in this category is really at the mercy of their sponsors.
Those in Category 2, these are professionals and smart people. They don't come here for nothing and life could be much much better for them back home. Most of them (I guess) seek full information about how life here is all about. They come fully prepared and they don't mostly have to suffer under current difficulties. Most of those in this category work for Companies like QP, RasGas, Qatar Gas, Oryx and other related companies which will provide them with sufficient Housing Allowance (and the Housing Allowance got revised quite frequently too in response to the real estate market). These people I guess will stay as long as Qatar looks more attractive and lucrative than their homelands.
People in the Third Category are those who are suffering and at the same time have choice whether to stay or to leave. People in this this category also are the ones that have been in Qatar for many many years, from my observations. There is also a trend that people that belong to this category are mostly from certain specific countries.
In conclusion, I share the same feelings as Sidewinder....the long term strategy could be due to some specific reasons, you can guess and God knows best!