Qatar: Burgeoning populations needs place to live
A burgeoning population needs a place to live, but pickings are thin in Qatar, coupled with an artificial shortage created around affordable accommodation
Qatar’s population is growing at an alarming rate as people flood into the small State to seek work on the infrastructure projects.
Edd Brookes, GM of DTZ notes, “Qatar’s double digit growth stats have been well documented over the past 10 years. Indeed even with conservative estimates, the population is set to increase from over 2.3 million today, to over three million by 2019.”
At the most basic level, people require accommodation, but Qatar’s rental prices are disproportionate to remuneration and often rise without warning. While recent redundancies in the oil and gas sector have resulted in an increase in rental vacancies, they are however, mostly in the prime residential market.
Brookes observes, “Rents have seen steep rises up until Q1 2015, when supply started to match and then exceed demand. However, the supply of new residential property has mainly been focused at the high end,” and that is where the problem lies.
It is the lower income group that has been hardest hit by the housing shortage. This has resulted in families sharing, sometimes with singletons, resulting in partitioned villas and apartments, and in some areas of Doha last year, reports abounded of illegal floors being added to buildings in an effort to bring the rentals down, by accommodating more people than legally permitted.
Brookes comments, “Such arrangements put additional burdens on building facilities such a parking and utility provision, including garbage disposal as well as and, perhaps most significantly, dramatically increasing health and safety issues,” he notes.
“The common areas of such buildings also suffer in rapid deterioration of common parts,” he adds.
Lower cost housing is still relatively difficult to find and not necessarily ‘low cost’. Brookes defines what this actually means: “Low cost housing would typically apply to those families with an income in the range of QAR10,000 to 17,500 and often the accommodation consumes up to 50% of this monthly budget,” he outlines.
He maintains that the government is committed to address this problem and well known Qatari private and quasi-government real estate developers such as Ezdan and Barwa have done much in providing lower cost accommodation outside the main city areas, predominantly in Al Wakhra, he informs.
Yet, there are entire blocks of apartments standing empty, as owners/landlords would rather rent to corporates than deal with the intricacies of getting rent from individuals each month.
They are holding out in the hope of further rises in rents and believe that companies can be extorted for higher rents and would be more reliable when it comes to payment. Renting out to companies also means that payments can be collected in a lump sum and apartments can be leased out for a period up to three years, giving landlords peace of mind.
While owners may benefit from this policy, it puts additional pressure on the limited-income man, who suffers while the rents increase because of manipulated shortages.
Coupled with this is the lack of official monitoring around real estate brokers who trawl the streets in their vehicles, looking for potential ‘marks’.
According to (an unnamed) real estate expert: “There is no official monitoring. Such brokers are operating without fear.”
Part of the problem may be resolved by restricting the widely spread practice of a company talking a head lease of a whole residential building and then leasing out the apartments at a significant profit, as well as regulating the brokers themselves, Brookes believes. “This would certainly encourage a more transparent marketplace which would also negate the application of the recently mooted impositions of rent controls – which in themselves are often of little use, given the number of ways around them” he adds matter-of-factly.
Accommodating the labour force however, while an ongoing thorn of contention in Qatar’s side, according to Brookes, “looks to fare better in the future with a number of labour cities either nearing completion or under construction,” all regularly scrutinised, he observes.
“Such complexes are regularly monitored by government inspectors (currently up from 150 to 300, with plans to expand to 400 in the near future) and provide minimum standards in terms of the provision of the number bathrooms, kitchens and leisure facilities per head,” he outlines.
But for the average, limited-income sector, there appears no reprieve in sight until rents are once again in realistic range.
Until then, sharing accommodation looks like the only (legal) answer.