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Wednesday, June 23, 2021

QNB: Increase in Qatar’s cost of living to accelerate in new year

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forrent
For illustrative purposes only

A cooling housing market and low international food prices will largely keep Qatar’s cost of living in check through the remainder of the year, a local bank has forecast.

Qatar National Bank (QNB) said in a report this week that the country’s inflation rate was 1.5 percent in the first seven months of 2015, down from 3.1 percent a year earlier.

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

However, the financial institution warns that the period of moderate relief for residents may be drawing to a close.

QNB predicts prices for consumer goods will remain subdued until the New Year, when the country’s ongoing population growth – combined with an expected rise in global food prices – drives inflation higher.

That’s largely in line with other predictions contained in a mid-year economic outlook published in June by Qatar’s Ministry of Development Planning and Statistics.

The average inflation forecast among 19 financial institutions was 2.4 percent for 2015 and 3.8 percent next year.

If those predictions prove correct, it could add more fuel to the perception among many residents that their salaries are failing to keep up with the country’s cost of living and make it harder for employers to retain skilled workers.

Housing

Paying for rental accommodations is one of the largest monthly expenses for many households in Qatar. In recent years, developers have failed to construct an adequate number of new homes – particularly in the low and mid-range segments – to keep pace with the ongoing influx of new residents.

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

That’s caused rents to climb sharply, with many tenants reportedly hit with annual increases of five to 10 percent during the first half of 2015, real estate researchers say.

QNB says the year-over-year increase in rent inflation slowed from 4.6 percent at the start of the year to 2.3 percent in July due in large part to an increase in supply as new homes came onto the market.

Others, however, aren’t so sure.

Earlier this year, real estate services firm DTZ reported that landlords are having no problem filling their units.

“We’re seeing new supply, but it’s barely keeping up with demand,” Johnny Archer, an associate director in DTZ’s Qatar-based consulting and research department, said at the time.

While company officials said they were seeing declining demand for employee accommodations from oil and gas firms, companies in other sectors – namely hospitality, healthcare and construction – are continuing to expand by recruiting additional expats who need a place to live in Qatar.

Food

With its minimal amount of farmable land and freshwater, Qatar overwhelmingly depends on imported food to feed its population. That means the country is susceptible to swings in global food prices.

Mangos at Wholesale Market
Mangos at Wholesale Market

For much of the year, this has benefited local consumers as bountiful harvests around the world has kept prices low prior to a seasonal spike at the start of the summer:

“Food prices in Qatar tend to increase every year during Ramadan,” QNB said.

Government official attempt to mitigate the price increases by ordering retailers to offer consumers discounts on hundreds of household items during Ramadan.

Have you noticed a change in the cost of living? Thoughts?

31 COMMENTS

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Ali
Ali
5 years ago

Doha news, can you one day write something interesting other than the ones that we already know!?

desertCard
desertCard
5 years ago
Reply to  Ali

It seems DN is really just a blog. I’d like to see some real reporting. Vetting out a crooked landlord, human interest piece on how it’s affected someone. For the education/experience claimed by the writers they don’t show me much. I think overstated. I could do what DN does now sitting in a cafe in Iceland.

Curiosity Killed the Cat
Curiosity Killed the Cat
5 years ago
Reply to  desertCard

The reports on reports, the articles from newspapers…. Meh boring……

Jen
Jen
5 years ago

Not being rude-but to everyone who moans abt Doha News-well no one is forcing you to read it.

Fsx
Fsx
5 years ago
Reply to  Jen

Exactly Jen, if you dont like it leave. Now where have I heard this?

Jen
Jen
5 years ago
Reply to  Fsx

Being told to leave if one is not over enthusiastic abt issues in Qatar is unreasonable-people,s lives are affected and people might need to stay for a variety of reasons, plus it affects one,s family–no easy solution! Reading news you want to moan abt has a simple solution-don,t read it, because no one forces you to and it is a simple action to take that has no bearing on others nor will affect one financially or family wise.

Michael Fryer
Michael Fryer
5 years ago
Reply to  desertCard

I’m waiting for a story on the Mohamed Morsi “Qatar espionage trial” that will recommence in Egypt tomorrow.

Yacine
Yacine
5 years ago

I have yet to see the slightest action from the government towards the extortionate rents. I assume they condone it and they are probably also benefitting from it at a personal level.

qatari
qatari
5 years ago
Reply to  Yacine

i 2nd that

Anonmauser
Anonmauser
5 years ago
Reply to  qatari

Which ties in nicely with our earlier conversation – who is benefiting from these high rents? Qatari business folks. Who pays them? I think that you can answer that one.

Michael Fryer
Michael Fryer
5 years ago
Reply to  Anonmauser

The downside is there are nationals who are renting their villas while they either wait for their land, or wait for their house to be built, and they are getting hit by higher and higher and higher rents. Unlike expats who have company provided accommodation there are nationals who are having much more trouble making ends meet.
The alternative is for newly married couples to remain living in the groom’s family home, which is causing no end of problems, and is blamed by some to be part of the reason for the escalating divorce rates in the country.

Anonmauser
Anonmauser
5 years ago
Reply to  Michael Fryer

Yep, but the Qatari elite still win, and really, that’s all that is important in the end, isn’t it?

Michael Fryer
Michael Fryer
5 years ago
Reply to  Anonmauser

Someone has to own all the compounds, so it might as well be the elite.

Anonmauser
Anonmauser
5 years ago
Reply to  Michael Fryer

Yep…I have a quibble though, shall we use the term ‘economic elite’? After dealing with more than a few during my time in Qatar found a disturbing number don’t fall into any other category of elite.

Michael Fryer
Michael Fryer
5 years ago
Reply to  Yacine

You don’t need to assume. Not long back, the government did put in place actual laws limiting the amount by which Qatari landlords could increase residential rent. Then the law lapsed, and nothing was done to extend it.
The government isn’t silent on the issue of rising rents – the government is actively allowing it to continue.
It makes perfect sense really, since deriving rental income from residential property is how the elite nationals maintain their standard of living.

Ali
Ali
5 years ago
Reply to  Michael Fryer

Who is making high rent a big problem is foreign nationals who are acting as middle men by subrenting after partioining the villa to accommodate 5 to 6 families

Skander
Skander
5 years ago
Reply to  Ali

Suuuure. Most rentable households here are flats.
Stop being ignorant.

Yacine
Yacine
5 years ago
Reply to  Ali

Seriously? I think it is the landlord who makes the partitions not the foreign tenants. Do you seriously think a tenant will partition his house on his own and sub-rent it to others without even getting the approval of the owner?

By the way, most expats are law-abiding people.

MIMH
MIMH
5 years ago
Reply to  Yacine

I would have thought you would have known that. The major landlords in Qatar and those in government are the same. Business in Qatar is a very incestous practise…….

Yacine
Yacine
5 years ago
Reply to  MIMH

Not sure if they are also in the government, but I am sure they have the most influential positions with the Qatar Commerce Chamber and other lobbying bodies. Still, they are hurting their country more than helping it with their selfishness.

Gaga
Gaga
5 years ago

High prices, but the quality is questionable. Expatriates are not idiots, sooner or later they will realize that Qatar isn’t worth it.

brorick
brorick
5 years ago
Reply to  Gaga

when other economies recover i think a huge amount of people will be leaving.

Ali
Ali
5 years ago
Reply to  brorick

Many nationals especially india are not coming to Qatar because the offer is not worth it this will also be the same later in Sri Lanka Indonesia Vietnam and the rest because these countries are growing rapidly

brorick
brorick
5 years ago

housing is getting impossible in doha, my rent is going up by 1000 riyal next month and since moving in they have started construction across the road till stupid o clock, which i can deal with but the dust! the dust is a serious problem for me, im healthy and its affecting me…i have to wash my car once a week, cant do that with my lungs!

brorick
brorick
5 years ago
Reply to  brorick

also real esate agents tend to be bad back home, but here they tend to be the least caring people in the world! they literally get away with breaking contracts and they know they can.

John Doe
John Doe
5 years ago

House rental upsurge is every country’s story and everyone has to bear this. The only problem here is, even after paying an arm and a leg what you get is like an apartment in one of mumbai’s slum!

desertCard
desertCard
5 years ago
Reply to  John Doe

I live in a pretty nice villa for $7000/mo that thank god my work pays for. the same place back home would cost me max $1200/mo mortgage.

Bajn
Bajn
5 years ago
Reply to  John Doe

With leaky noisy window ACs, no lifts, no covered parking, 1 years’ post dated cheques…..

MIMH
MIMH
5 years ago

“services firm DTZ reported that landlords are having no problem filling their units.”

In other news, banks in Qatar said the services charges are not high and represent excellent value for money for their services.

Seriously why take quotes from those that have a vested interest in the market and keeping rental prices high. News should be independent without pushing vested interest opinions as that creates a false story.

MIMH
MIMH
5 years ago

It’s all lies by people trying to talk up their business. Well paid expats have lost their jobs in their thousands but the population is the same as they are replaced by cheap labourers.

Qatar is hurting, money is being lost and business is not booming. Anyone who loses over 40% of their income in just a year we make large cuts in expenditure

http://m.france24.com/en/20150830-qatar-exports-plunge-over-40-pct-year?aef_campaign_date=2015-08-30&aef_campaign_ref=partage_user

AEC
AEC
5 years ago
Reply to  MIMH

Wouldn’t that depend on what it was spent on before? If it mostly went into the bank then what difference?

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