House rents in Qatar to become stable due to oil price crash

House rents in Qatar have gone up by about 20 percent over the past one year, but the oil price crash may help stabilise the market and prevent an unreasonable further hike, say industry sources.

The dwindling oil prices, however, have not caused a downturn in the market until now, which is witnessing a good demand for properties, especially in the residential sector.

The increased influx of professionals recruited for mega infrastructure projects was the major factor that jacked up demand for residential space.

However, the falling oil prices have slowed down the pace of recruitment, with many employers becoming sceptical about the future.

"Oil price fall does have an impact on the market and the future trends would largely depend on the variations in oil prices," said Mohsen bin Abdul Rahman, who works with the Tariq Al Kubaisi real estate company.

"This does not mean that the market is dull. There is still good demand for the properties," he added.

He said a campaign launched by the authorities last year against partitioning of villas had left many residential units vacant. Several real estate companies have hired such villas and spent huge amounts on refurbishing them but could not find enough takers.

Partitioned villas would require major renovation to bring them back to their original condition.

"We spent about QR50,000 for renovating a villa but now we are not able to recover that money due to a relative slowdown in the market," he said.

Another real estate expert said that the year 2014 was one of the best for the industry with prices witnessing a 10 to 20 percent increase.

All the leading real estate companies, including the state-backed firms, have increased their prices, cashing in on high demand generated by the increased influx of professionals and other foreign workers to the country.

"The market is stable at present and a further hike in rentals cannot be expected due to the fall in oil prices. There is a shortage of residential space in the market compared to the demand and this could have jacked up the prices further. However, a lull in recruitment after the oil price fall has slowed down the demand," he said.

Rents for a two-bedroom flat currently range from QR6,000 to QR7,500, while a three-bedroom facility costs up to QR10,000 a month. Rents for medium-range villas have gone up from QR12,000 to QR15,000 over the past year.

He said the campaign against partitioned villas didn't have a major impact on the market since the authorities had not pursued it vigorously. They identified several partitioned villas but action was taken in very few cases.

"Maybe they are aware of the fact that a large number of low- and middle-income expatriates, including families, rely on such properties and an intensive crackdown could create a crisis in the market." [The Peninsula]