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Friday, April 23, 2021

MDPS: Qatar tenants enter 2015 with a break from rent hikes

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Photo for illustrative purposes only.
Photo for illustrative purposes only.

Residents grappling with the ever-increasing cost of housing in Qatar received a reprieve last month as landlords put the brakes on rent increases, new government figures show.

The latest consumer price index report from the Ministry of Development Planning and Statistics shows that the cost of rent, fuel and energy was flat in December compared to the previous month.

CPI basket – 2014 – Rents, fuel and energyHowever, a year of steadily increasing rents means the cost of rental accommodations was still 7.3 percent higher last month than in December 2013.

Meanwhile, the cost of all categories of consumer goods were either unchanged or declined compared to November, pulling month-over-month inflation into negative territory and leaving residents with a little bit of extra money in their wallets heading into 2015.

Overall, the consumer price index fell by 0.3 percent in December compared to November. That’s the sharpest monthly decline in more than a year.

Dropping prices

The largest decreases were recorded in entertainment, recreation and culture (1 percent), transportation and communication (0.5 percent) and the food, beverages and tobacco category, which dropped 0.4 per cent.

Photo for illustrative purposes only.
Photo for illustrative purposes only.

Economists had predicted a fall in food prices due to bountiful harvests in major agricultural areas around the world, but forecast that residential rents would keep rising due to increasing demand for housing from Qatar’s rapidly expanding population.

Indeed, other data suggests that December’s rent freeze is likely to be a pause rather than the start of a long-term trend.

Qatar National Bank (QNB) has argued that changes in rental rates tend to follow movements in land prices with a six-month lag.

In its latest monthly economic report, QNB said land prices shot up 92.7 percent last month compared to December 2013, suggesting that rents would continue to rise in the first half of this year.

“The combination of rapid population growth and higher GDP per capita are leading to a strong increase in the demand for housing, pushing up real estate prices,” researchers at the local bank wrote.

“As the population expands and per capita income rises, both a base and an income effect push land prices higher. This is likely to continue over the coming years, in line with the favorable outlook for the Qatari economy.”

Big picture

Qatar’s year-over-year inflation rate in December was 2.7 percent, which is on the low end of what many economists had predicted.

However, many of the forecasts were drafted before the recent plunge in oil prices, which could be helping to keep a lid on rising prices.

Source: MDPS
Source: MDPS

Looking ahead, tumbling oil prices will likely reduce shipping costs for freight transporters, which is good news for consumers in a country like Qatar, which imports the overwhelming majority of the products that appear on store shelves.

Elsewhere, declining prices for crude will also make it cheaper to travel. Last week, Qatar Airways CEO Akbar Al Baker said the country’s national carrier plans to reduce the fuel surcharge on passenger fares.

Falling oil prices won’t, however, lead to cheaper prices at the petrol pumps.

Fuel in Qatar and elsewhere in the Gulf is already heavily subsidized and, even with the recent plunge in oil prices, motorists in this country are still paying less than market rates, according to a Qatar Fuel (Woqod) official.

Speaking to the Peninsula this week, an unnamed spokesperson for the company said it was unlikely retail prices for petrol and diesel would be reduced.

Thoughts?

18 COMMENTS

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Del
Del
6 years ago

“Residents grappling with the ever-increasing cost of housing in Qatar received a reprieve last month as landlords put the brakes on rent increases”

That’s f**king nice of them, criminals.

MT
MT
6 years ago

Where is this data from? Myself and everyone I know have had their rent go up 10%.

Peter Pickle
Peter Pickle
6 years ago

Ezdan Villages have just hiked up their rent. #WTF???
No break from rent hikes…. this is a misleading report I say.

Doha-Boro
Doha-Boro
6 years ago

Err this is totally misleading, I was given a 10% hike 2 days ago. Like others have said everyone I know are still receiving hikes.

ShabinaKhatri
ShabinaKhatri
6 years ago
Reply to  Doha-Boro

Two days ago is January…these are December figures.

Jaded
Jaded
6 years ago
Reply to  ShabinaKhatri

funny reply, but I have a hard time believing the data, hikes all round

Bo
Bo
6 years ago
Reply to  ShabinaKhatri

Yeah but does this not suggest to you that the report is tosh?
Or at least the statistics are saying this but the effect it isn’t being noticed on the ground?

Some journalists would use this valuable feedback from the people on the ground to question the report, especially as multiple sources are reporting 10%+ rises in rent. I have read no feedback so far of anyone reporting a 10% saving to balance the figures to 0%.

Also, would be nice to see some research into real examples of the reduction in costs? Have cinema prices reduced to account for the entertainment reduction; taxi prices for transportation; restaurant prices for food? Surely real journalism is about questioning and validation – is there anything here i couldn’t have got from going to the press release on the Ministry of Development Planning and Statistics website?

Bo
Bo
6 years ago
Reply to  Bo

Incidentally, there is another article talking about the rise in construction costs where

“…the report doesn’t explicitly mention the factors driving costs in Qatar, other analysts have previously pointed to competition for materials and skilled workers…”

However, this report has identified that land costs have increased 92.7 percent from Dec 2013 – i’m no journalist, but…

dubious
dubious
6 years ago
Reply to  Doha-Boro

Just got my letter last week too – ker-ching!

Ali El Ali
Ali El Ali
6 years ago

Its seems Doha news are staying in a no increase rent zone .
Rents are sky rocketing as i am typing this post !!!

Althani
Althani
6 years ago

The comments are contradicting the article

sicti
sicti
6 years ago
Reply to  Althani

Yes, because DN is referring to a parallel universe where landlords are humans

Althani
Althani
6 years ago
Reply to  sicti

heh

sicti
sicti
6 years ago

In Barwa City there is a rumour that 3BHK rent will be increased by 2000 QR so….

DJ25Q
DJ25Q
6 years ago

for the last 14 years, rents started the race to infinity
obviously it’s not demand and supply
unless you earn a salary that is decent enough, and willing to spend most of it on housing , then you can enjoy your life style here. Honestly, expats ( and residents who stay in rented property ) are all together in the same boat, even though their incomes are different. Wish that consumer protection can intervene.

Jaded
Jaded
6 years ago
Reply to  DJ25Q

what is this consumer protection you speak of?

Dazk55
Dazk55
6 years ago

I had a 12.5% rent increase in May 2014, if my landlord increases it again by the same % this will cause issues as my employer does not / will not increase the housing allowance to keep in line with rising costs of living… why was the Law on rent rises not renewed?????

Jason
Jason
6 years ago

I was in my compound office (run by Al Mana group) on Thursday and they said 5% hikes were ordered.

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