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Thursday, May 13, 2021

Report: West Bay rents soar as luxury housing grows more scarce

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West Bay

Omar Chatriwala

As Qatar’s population grows at a rapid clip, it is becoming harder to rent and live in the West Bay/Dafna area, thanks to rising prices and falling supply, according to US-based international real estate services firm DTZ.

The company – which leases, sells and manages a number of properties in West Bay and at the Pearl-Qatar – has just released its quarterly market overview. The report found that demand continues to outpace supply, despite a 32 percent jump in the number of luxury apartments in the 2 years up to the end of 2012.

The report added that 4,000 new luxury apartments are due to come onto the market in the next few months, but forecasted that only 10,000 people would be needed to fill them – a fraction of Qatar’s expected population growth of 200,000 people over the next year.

Since 2011, demand has caused rental rates for luxury properties to increase 15 to 20 percent, the report continues. A three-bedroom apartment at the Pearl or in West Bay, for example, now rents for an average of QR18,000 a month, compared to QR15,000 two years ago.

Compounding the problem is the fact that many new towers have been slow to come onto the market this year, said Mark Proudley, Associate Director at DTZ:

“Only one new tower at The Pearl has come onto the market this year… DTZ understands that a number of the virtually completed towers are just waiting for final Civil Defence certification, though obviously ensuring Health & Safety standards are met is a priority.”

City-wide rent rises

Although only a small percentage of Qatar’s residents can afford to live in these high-end buildings, the rental increases in this area are indicative of a wider issue across Doha.

The Qatar Statistics Authority’s latest inflation figures show that rent, fuel and energy costs have gone up 6.1 percent in the last year, largely as a result of increased housing rents. Proudley said:

“It is a case of a similar scenario across the board, given the huge increase in demand. There’s also a trend whereby we’re seeing some of the largest organisations looking at acquiring entire compounds and towers.

If they take over a whole tower, that soaks up a whole amount of new apply. There are also very few new compounds under construction, and the best quality compounds are full and have waiting lists.”

Earlier this year, a Doha News housing survey showed that many Qatar residents are feeling the squeeze as rents rise while income and housing allowances largely stay the same.

Many residents expressed concern that Qatar is about to revisit the rental price bubble it experienced in 2008. At that time, the government introduce a rental law setting a 10-percent limit on price increases for tenants renewing their contracts. The restriction, which was designed to restrict rapid inflation of rental prices, ended in 2010.

If rents continue to rise, recruitment may become even harder for many construction firms, who have said they’re already struggling to recruit professionals to help build high profile World Cup and transport-related projects due to a lack of school places and the high cost of living in Qatar.

Thoughts?

22 COMMENTS

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MIMH
MIMH
7 years ago

DTZ
“The company – which leases, sells and manages a number of properties in West Bay and at the Pearl-Qatar ”

Says it all really. Hardly an unbiased report from a company with an incentive to drive up rents

Myrddin
Myrddin
7 years ago

This is an exercise in ‘talking up the market’.

Many residential towers are clearly under-occupied, a ‘skeleton’ tower in West Bay would have construction workers furiously completing it so that the owner could cash-in on the demand, it is a zombie. The tower cranes on the Pearl would be a distant memory, yet many are idle?

The only reason West Bay is busy, is the shoppers at City Centre, it is certainly not because it is full of residents.

London/New York City rents, but Doha is neither, yet that is what the owners expect.

dubious
dubious
7 years ago
Reply to  Myrddin

I can see 2 empty apartment towers and one empty office tower from my desk at work, plus 2 skeletons that haven’t had a worker on them in a year. Also 3 giant holes in the ground, 2 of which are progressing (one the neatest construction site I’ve ever seen), and 1 which looks to be a scam as all they’ve done in 15 months is dig down a level and push the pile of sand from one side of the site to the other and back again a few times!
Having recently been looking around West Bay to find somewhere to beat the traffic, there seems to be extensive price fixing going on. Many towers will also tell you that they’re full, but if you put yourself down on the waiting list we found that spaces normally came open within a few weeks. Now that could be Qatar’s fickle job market and NOC slavery system, but almost every tower? Colour me suspicious.

KK
KK
7 years ago

Sorry DTZ, nice try…

Diego
Diego
7 years ago

My feelings are rental units charge too much in the first place.Labour costs were and are cheap, many units have faulty drainage due to rushing and other causes and it isn’t London, New York or another major city where the prices charged in Doha would get you an excellent place.

Chipper fluffypants
Chipper fluffypants
7 years ago

I would like to know how many of the 200,000 people moving to Qatar in the next year can afford 18,000 a month rent- even 10,000 a month rent? Especially for a small apartment. I can get a 5 bedroom stand alone villa with a pool for 18,000 a month. Or a 4 bedroom villa in a luxury compound with all amenities and my personal outdoor living space. Who would pay 20,000 for a tiny apartment? Especially if you still have to get into a car and fight traffic to get anywhere.

DavidRSS8
DavidRSS8
7 years ago

Foreign companies (especially US and Western European) who want properties that are completely furnished and serviced. There is a fairly sizable market for this, especially for companies that are bringing in employees through for short periods.

Yes, they are obscenely overpriced, but then the companies simply then overcharge the Qataris for their services. It’s just another way of shuffling money from one Qatari to another.

Chipper fluffypants
Chipper fluffypants
7 years ago
Reply to  DavidRSS8

True, but out of these 200,000 people- how many are Western expats who’s company will pay these amounts? Especially when there are no schools for their children? Plus, if they come with families, they want villas in compounds- not 3 bedroom apartments.

DavidRSS8
DavidRSS8
7 years ago

Of the 200,000 people coming in, I would be shocked if more that 10% were Western expats. They will likely be almost entirely construction workers from Asia (to build more luxury apartments!).

I agree about the schools–it’s one of the biggest deterrents to recruiting and retaining good professionals.

There is no shortage of compound space in this city for overseas professionals either. Having said that, an increasing number of people in my company are opting for larger serviced apartments in West Bay over alternatives of large villas elsewhere–easier to deal with, better location, etc. But then these people only tend to stay for a couple of years.

dubious
dubious
7 years ago
Reply to  DavidRSS8

One thing I’ve noticed in Qatar rather than other GCC countries is that so many expats here treat the place as transient. Many in my office rent fully furninshed and drive hire cars for instance – there is no plan to set down roots. It’s all get in, do a few years, get out.

In other places expats seem more relaxed about establishing a life. I suspect it is largely the NOC problem combined with Qatar’s somewhat fickle business environment.

DavidRSS8
DavidRSS8
7 years ago
Reply to  dubious

Yes, very true. I have not met many expats that plan on staying more than a few years. The reasons are plentifully and diverse, but basically they boil down to the fact that Qatar still is not a place Western expats typically want to leave for very long–plenty of exceptions and maybe this is by design.

DB
DB
7 years ago

You could house the entire city in the Pearl buildings that are currently unoccupied. Not buying it.

dubious
dubious
7 years ago

I don’t want a ‘luxury’ apartment/villa, especially out here where the luxury finish has been added so cheaply it’ll probably fall off in 6 months along with the balcony, I want a _quality_ apartment/villa.

Doesn’t need to be 500 square metres.
Doesn’t need 8 bedrooms.
Doesn’t need 3 majilises and a private pool and golf course.
Doesn’t need gold taps and light fixtures.

It does need a minimum of 2 covered parking spaces for anything up to 3 bedrooms. Looked at a 5-bedroom house here that only had one parking spot! Unacceptable.
It does need a good level of finish to ensure the ACs aren’t exploding, the electrical box doesn’t catch fire, or the balcony slowly peels away from the side of the house? Experienced all those over the years.

Paying more than tuppence ha’penny to get a proper architect rather than some trainee might also eliminate some of the issues we saw trying to find somewhere to live here, such as a kitchen with no electrical sockets.

I know you won’t pay for qualified laborers, so at least get a few exceptional foremen who actually know how to build a house.
For new builds, put central AC in for pity’s sake, and how about thinking ahead and installing ducting for network and audio?

greg
greg
7 years ago
Reply to  dubious

Oh man! 10000% with you!!! “where the luxury finish has been added so cheaply it’ll probably fall off in 6 months along with the balcony”, like for example…everywhere!
“the electrical box doesn’t catch fire” in our villa, they by passed the fuses in the elec.box with thick wire!!!!!!…it exploded

Ali
Ali
7 years ago
Reply to  dubious

I have also observed this balcony thing here. The place where I live and the building opposite has cracks visible from outside under balconies so sometimes I am afraid to stand there.

greg
greg
7 years ago
Reply to  Ali

well, give peanuts and you get monkeys for your super duper 0* villa built by unskilled workers…and the fault is from the management,not the workers

Biby Chacko
Biby Chacko
7 years ago

All these buildings are just build to make huge sum of moneys…i don’t think so the materials used or the safety measure or the assets used in these buildings are up to mark..because recently i heard a news about, pipe leaking and many other issues in such building….ARE THESE BUILDINGS STRONG LIKE THE OLD ONES??????
Why cant they do something for the lower class or middle class people also????

disqus_0pokg1GjBm
disqus_0pokg1GjBm
7 years ago

Qataris mainly have their own homes which tend to be houses. Therefore, all these luxury and overpriced properties in west bay and the pearl are predominantly aimed at expats.

Unless companies are getting corporate rates and booking these flats directly for their staff such as is the case with O&G mns, I cannot see many people willing to such ridiculous rates to live in traffic ridden properties that have extortionate service rates which would eat into the saving that expats come here for in the first place.

A lot of the price movements is seemingly related to rumors and speculation. There aren’t 200,000 more people here now, the illusion is more likely to be based on the road work led congestion on the roads. Yet, most of our rents will creeping up.

DavidRSS8
DavidRSS8
7 years ago

I’ve lived in one of these places for over a year, and, as far as I know, every unit is rented by a company or embassy. None of them are privately rented, although i could be wrong. My sense is that this is true in most of the higher end apartment buildings.

greg
greg
7 years ago

comppanies that rent offices and flats/villas, are the worst I have ever seen in my life!!!!old ads, not duplicates but 100 times the same advert with other pictures, you call they say, oh we gave that 2 month ago even if the ad is posted a week ago. They are the worst!

Grantley
Grantley
7 years ago

The rent here is out of control. I could rent an apartment overlooking the Colosseum in Rome for what I pay here to overlook waste ground. The buildings are all Qatari-owned so they pay us a rent allowance for us to pay it back to them. It’s what’s known as “wooden dollars” but it’s creating an artificial market and discouraging professionals from coming here to work. This can only prove detrimental to the development of the country for WC 2022. As usual, it’s all about the next five minutes rather than the long term. Meanwhile, rents increase annually whilst rent allowances and salaries remain the same so we’re actually now earning less than we were when we first came. That, combined with the poor standard of and expense of education (assuming you can get places for your children, of course) is what will force professionals to take their skills and knowledge elsewhere.

dubious
dubious
7 years ago

everyone: too much!

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