DOHA: An Asian expatriate in a middle-income job that pays him close to QR10,000 ($2,746) a month, tired of looking for an independent housing unit he could afford, had to eventually move into what was a make-shift living space in a partitioned villa compound in a working class locality of Doha.
Living in a claustrophobic enclosure, in his own words, with little space for free movement for him, his wife and a child is less of a challenge than the fact that almost every month there is a fight with neighbours over splitting water and electricity bills.
“This apart, the place is noisy all the time, but we can’t move into an independent apartment as that is far beyond our means,” says the expatriate with a sense of helplessness.
An Arab family living for years in an old apartment in the Old Airport area of the city had to compromise its privacy and rent out a room to a working woman to be able to afford the rent the new owner of the building had suddenly increased.
These are not scattered cases of middle-income families suffering, as the shortage of affordable housing in the country worsens amidst an influx of foreign workers that is becoming heavier by the day.
Data released earlier by the Qatar Statistics Authority, the national statistics agency that is now merged into the newly-set-up Ministry of Development Planning and Statistics, reflect that in the five months between January and May of this year alone some 130,000 new recruits arrived in the country, taking the population to 1.96 million, from 1.83 million by 2012-end.
In 2012 itself, the population grew 7.5 percent, or more than a 100,000, topping the annual targets set within the National Development Strategy (NDS) 2011-16.
An idea of unplanned population growth can be had from the fact that while the target for 2013 was 1.78 million, by May itself, it had reached 1.96 million, and is expected to cross the two million-mark by year-end.
As more and more foreign workers arrive in the country to engage in development projects being launched in preparation for the 2022 FIFA World Cup, the pressure on housing, as also on other resources, mounts.
“Naturally, housing will be the worst affected as the demand grows and shortages take place, sending the rents spiralling,” says a real estate sector operator.
Since many development projects are likely to be announced after the summer break, real estate sources expect a sudden influx of foreign workers in just a few months.
And although a vast majority of them will be unskilled and semi-skilled workers who would be housed in labour camps, that are also in short supply and expensive, a small proportion would consist of skilled workers and professionals who would bring their families along and need housing.
The situation is, thus, likely to turn worse especially as only 10,000 new housing units are expected to come on the market this year, again not in the affordable categories, as against an estimated 18,000 that were added last year.
Some believe the growing population could turn the situation uglier than that during and after the 2006 Asian Games when acute housing shortages caused by large-scale demolitions in Doha for beautification and development projects led to multifold rise in rentals.
Monthly house rents averaged at under-QR2,000 before the population began growing from 750,000 in 2004, to over QR5,000 now, (in 2013) when the population is nearly three times that.
The fears of the rental market going out of control in a repeat of the nightmarish trend witnessed during 2006-08 are real for some despite the assurances given earlier by the country’s planning agency (the General Secretariat of Development Planning that is also merged into the newly-created ministry) that the situation wouldn’t be that alarming (due to the development projects being launched for the FIFA event).
The GSDP had said while releasing inflation figures late last year, when it reported for the first time in four years since the peak of inflation at 15 percent in 2008, that rents had begun showing an upward trend.
Last June, for example, the yearly inflation was 3.4 percent, and rising rents seemed to have had a major impact as they grew 6.8 percent year-on-year.
The scepticism is largely among limited-income families who are not provided with free housing by their private sector employers and are instead entitled to rent allowance that is most of the time modest and below the prevalent market rent prices.
Property sector sources say developers, post the 2006-08 housing shortages, have largely focused on upper-middle and higher-end stocks, including apartments and villas, and have entirely ignored affordable housing for expatriate families in lower-middle income groups. Ezdan and Barwa have built mass housing stocks for the above categories of expatriate families but the stocks are just not sufficient to meet demand.
Ezdan, although it offers promotions like free rentals for a few months, one needs to enter into long-term tenancy agreements and provide post-dated cheques, said a real estate sector source. “This many expatriate tenants find inconvenient as they are unwilling to have long-term commitment.”
So the shortage of affordable housing not only remains, it is becoming acute.
While one can find with some difficulty a one-bedroom apartment in a working class locality in Doha for up to QR5,500, smaller units are not easily available in other areas.
Two and three-bedroom apartments in new buildings in several areas of the city and its outskirts are common but their rents are high.
Rents can soar up to QR15,000 in prime spots such as The Pearl and the West Bay, according to market sources.
These (high-end apartments and luxury villas) are the housing stocks that mostly companies provide to their senior employees, including top professionals and senior members of their management.
A severely lack of affordable housing has led to a mushrooming of villa compounds all over, mostly in and around Doha that cater to expatriate families in lower-middle income categories — those with monthly income of QR10,000.
The makeshift pigeon-hole residential units in the dangerously partitioned villas pose severe safety risks to their occupants.
Another trend in witness these days is that a large number of limited-income expatriate families that are leaving to spend summer vacations home, are giving away their rented houses — howsoever small — on temporary rent.
The classifieds sections of local newspapers are full almost daily with advertisements by such families soliciting sub-tenants for one, two to three months.
According to real estate sources, these are the tenants in limited-income brackets who are taking advantage of a void caused by the shortage of affordable housing and catering to those expatriates who are living here single and want their families to join them briefly during the summer break.
Experts say that unless corrective measures are taken and developers focus equally on affordable housing, the rent situation might spin out of control in the years to come. The Peninsula
DOHA: The outlook for commercial retail space is no different from residential units. Demand outstrips supply due to exponentially growing population. The gross leasable area (GLA) per capita of organized retail space (shopping malls) is much lower in Qatar compared to regional standards such as Dubai and Abu Dhabi.
Despite many new malls coming up in next couple of years, asking rentals in these upcoming malls are 20 to 30 percent higher when compared to the existing rates, clearly reflecting a bullish market trend. By 2015 over 1.1 million square metres of additional retail space will be ready for commercial use, but owing to the rising population rentals are not stable.
Currently, according to the latest figures available, the retail space supply in the organised sector is over 600, 000 square metres (sqm), and last year nearly 45,000 sqm of additional retail space came onto the market. The given figures do not include new strip or high-street retail delivered so far.
Despite the future retail market being bullish, the current rentals, however, are relatively stable. According to the latest Tanween Report, rents for line tenants in malls have remained more or less steady for the past few quarters, in the range of QR200 -QAR 250 per square metres.
And interestingly, strip retail rentals are 30 to 40 percent lower than rentals in malls. But analysts suggest that due to further expected growth in the population of lower and lower-middle-come people, there are opportunities for strip retail re-development in secondary business districts (SBDs).
As far as the hotel sector market outlook is concerned, with the government targeting to attract two million tourists by 2015, the demand for high-end hotel rooms (four and five star category) is expected to dominate the market.
The average occupancy rates in such hotels were higher in Q1 2013 compared to the corresponding period last year. Twelve new high-end hotels opened in 2012, delivering an estimated 2, 200 additional rooms to the market, and an additional 1,500 rooms are to be delivered during 2013.
