40 C
Doha
Friday, September 17, 2021

Rising rents push up Qatar’s cost of living, despite food price drop

-

skyline

Prices increases for consumer goods in Qatar slowed for the second straight month in October, as lower international food costs helped give local shoppers a break at the cash register.

However, those who are looking for new rental accommodations or are renewing their lease could be forgiven for failing to notice.

The Consumer Price Index (CPI) – which helps track the changes in prices of a defined basket of everyday goods and services – rose 3 percent in October compared to the same month in 2013. That’s down from year-over-year increases of 3.6 percent in September and 3.8 percent in August.

CPI Oct 2014 rentAs in past months, the increase recorded in October was mostly driven by the escalating cost of renting residential property in Qatar. The government statistics showed a 8.2 percent rise in “rents, fuel and energy” for the 12 months to October.

This is one of the biggest increases in recent years and is up slightly from last month’s figures, which showed a rise of 8.1 percent year-on-year for the same sector.

According to figures published this week by the Ministry of Development, Planning and Statistics, prices also increased for:

  • Furniture, textiles and home appliances (up 3.5 percent);
  • Clothes and shoes (up 2.9 percent);
  • Transport and communications (up 1.7 percent);
  • Entertainment, recreation and culture (up 1 percent); and
  • Medical care and medical services (up 0.8 percent).

Cheaper food

 One of the few sectors which shows a drop over the last year is food, beverages and tobacco. The October figures showed a decline of 0.6 percent year-on-year.

This is broadly in line with recent trends for food prices and reflects Qatar National Bank’s predictions made this summer that food in Qatar would get cheaper.

This is in part due to bountiful harvests around the world, which have pushed down global food prices.

As Qatar imports almost all of its food requirements, the cost of edibles internationally is an important aspect of its economy.

In a report, the bank said that the lower food prices would help offset the rising cost of rental accommodation, keeping Qatar’s inflation at around 3.5 percent until 2015.

However, one foodstuff which is is bucking this trend is ginger, which has been rationed by some supermarkets in Doha as prices are pushed up due to an international shortage.

Safari Mall has set a limit of half-a-kilo of ginger per person in a bit to meet demand for the root, which is a crucial ingredient in Indian and South Asian cooking, Gulf Times reports.

The newspaper quotes the hypermarket’s fresh produce manager as saying the shortage it attributable to heavy rain in India that has affected the country’s harvest. At this particular store, the price of ginger has risen from QR10/kg to QR18/kg.

Furniture loan

The One furnitureCoinciding with the publication of the latest CPI figures that show a rise in the cost of furnishing a home, the International Bank of Qatar announced this week it was launching an interest-free loan for Qatar nationals and expats to buy high-end furniture.

The first loan of its kind in Qatar aims to attract many of the thousands of expats who move here each month as the country gears up to deliver its numerous infrastructure projects in time.

While there are a number of brand-label home furnishings stores in Qatar, for a long time there was a shortage of affordable furniture, with residents relying on second hand sales and Souq Haraj for bargains, until Ikea finally opened its doors in March last year.

However, that doesn’t appear to have stopped the ongoing hike in prices.

While the new bank loan program will help some shoppers experiencing temporary cash-flow problems, such as new expats incurring moving expenses, it could also encourage residents to take on more debt.

Despite being one of the richest places on the planet, Qatar is also a country mired in debt. A 2011 government report found that three-quarters of Qatari families are in debt, with the median household owing QR250,000.

In 2011, the government attempted to alter public attitudes with an awareness campaign under the banner, “Debt is disgraceful.”

Thoughts?

19 COMMENTS

Subscribe
Notify of
19 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Deepak Babu
Deepak Babu
6 years ago

I hate this monthly update on increasing rents article. Just so depressing. You should include a feel good story along with this monthly article to balance it out.

Bornrich
Bornrich
6 years ago
Reply to  Deepak Babu

This is a feel good story. For landlords. : )

sadam
sadam
6 years ago

Good Debt
There’s no better example of the old adage “it takes money to make money” than good debt. Good debt helps you generate income and increases you net worth

VS.
Bad Debt
Certain debts are downright bad. Items that fit into this category include all debts incurred to purchase depreciating assets.

Maybe Qatari Families are into investing??

Ali
Ali
6 years ago

Who says food price has dropped? Sometimes I go to eat Chicken Biryani at a restaurant and it has increased the price from QR16 to QR17!!!!!!!!

MIMH
MIMH
6 years ago

The rental myth needs to be busted, Doha is not just one market it is split into many. At the lower end of the scale, the cheap places, there is a lack of accommodation as much of it has been knocked down in the last few years. However the middle and high end there is a glut of properties just sitting empty, so there should be no pressure on rents.
However some landlords are willing to let places sit empty rather than reduce the rent to below what they think it is worth. Pure commerical madness on their part as they then lose out on rent they could have got if they were more business minded.

You also have the real estate agents trying to talk the market up as it is in their interest to get as high as rent as possible. They tell you another 200,000 people are coming to Qatar, true but 197,500 of them are labourers housed in labour camps and so do not affect the rental market at all.

Bornrich
Bornrich
6 years ago
Reply to  MIMH

It’s a myth that agents hold out for higher rents. They would rather get the property filled and take the commission today than hike the rental by 5%-10% and wait for a tenant. This will give them a fractional increase on their one-off percentage commission, of say 1%. Hardly worth waiting for. The people increasing rents will be the landlords.

As for your other point, it’s called a cartel. Market dynamics don’t get a look in.

MIMH
MIMH
6 years ago
Reply to  Bornrich

That is not what I said, I said that agents are trying to talk up the market, I didn’t say they were holding out for higher rents.

DJ25Q
DJ25Q
6 years ago
Reply to  MIMH

“However some landlords are willing to let places sit empty rather than reduce the rent to below what they think it is worth” spot on ! This is a dilemma most of us here ( including some Qataris ) are suffering, since early 2000 ( as soon as Asian games were announced to be held in Doha in 2006 ). Merchants and service providers justify increasing their prices due to rent increases by landlords. I don’t see a possible solution until forcing laws that limit the maximum monthly rent based on total area, number of rooms, facilities, and location. Big real estate companies are also increasing their monthly rents illegally, and tenants under pressure will have no option but to pay as the concerned court will take plenty of time to settle the case. Instead of increasing salaries without limiting the rents, is directly feeding the inflation.

Jason
Jason
6 years ago

I do not know if it still holds true, but back in the first big boom following the Asian Games in 2006, many properties sat empty. It was commonplace to find landlords asking to rent the entire building / block of flats to one company. The story I was told at the time was that the law was written so that landlords do not have to pay back the loan until the property was occupied by tenants. This gave the landlords zero incentive to get property rented out until they got their over-the-top asking prices. If the banks were asking for payments upon completion of construction, landlords would be a lot more motivated to get places rented out at reasonable prices.
Food for thought.

DJ25Q
DJ25Q
6 years ago
Reply to  Jason

True

A_qtr
A_qtr
6 years ago
Reply to  Jason

Banks are awash with cash and they need to be able to loan it out… Developers can shop around for best terms and cheapest interest rates

A_qtr
A_qtr
6 years ago

Too many bloody people … Just to many… The city needs another five years of development just to put up with the current population …

Driving around old Doha today… All swears were flooding :/

DJ25Q
DJ25Q
6 years ago
Reply to  A_qtr

you mean it needs development while thinking at least 25 years ahead, instead of working with statistics and figures of current/last years. Major intersections and roadworks are a good example of poor planing. Old airport intersection for example took years for completion, once opened, it was a nightmare, and was getting worse by time. Just an example !

MIMH
MIMH
6 years ago
Reply to  A_qtr

I agree the country needs a pause for 5 years on extra projects and work. Vanity bidding for every major sports tournament or conference hosting all in such a short space of time leads to the ordinary people having to put up with misery for most of the next 10 to 20 years. You build this fast and when the crash comes it will be hard, just look at what happened to Dubai, all confidence gets sucked out of the market.

Expat_QTR
Expat_QTR
6 years ago

SO many expats coming to Qatar. i hope they tell them, “Your salary is going to stay stagnant for 5 years but Rents, food, clothing, furniture and entertainment is going to increase monthly. Wish you a pleasant stay in here”.

LOL just laughing on my misery 😛

Chipper fluffypants
Chipper fluffypants
6 years ago

How does lower food prices offset rising rent? Saving 50qr at Carrefour does not equal the 1,500 monthly rent hike..

SokhnaFan2010
SokhnaFan2010
6 years ago

…….I feel I am on the Katara roundabout…………….

Bob Lee
Bob Lee
6 years ago

Good Day Sir/Madam: Getting a legitimate loan have always been a huge problem To clients who have financial problem and need solution to it. The issue of credit and collateral are something that clients are always worried about when seeking a loan from a legitimate lender. But.. we have made that difference in the lending industry. We can arrange for a loan from the range of $3000.00 to $10,000.000.00 Our Services Include the Following: Debt Consolidation Second Mortgage Business Loans Personal Loans International Loans Loan for any kinds Family loan Xmas Loan E.T.C No social security and no credit check, 100% Guarantee. All you have to do is let us know exactly what you want and we will surely make your dream come true. (BOB LEE FAST GLOBAL FINANCE COMPANY). says YES when your banks say NO. Lastly, we fund small scale loan firm, intermediaries, small scale financial institutions for we have unlimited capital. For further details to go about procuring a loan contact us, Kindly respond immediately to this email: bobleefastglobalfinancecompany@gmail.com Note that loan is given out in 2% interest rate yearly, kindly get back to us now if interested.

Bob Lee
Bob Lee
6 years ago

Bob Lee Fast Global Finance Company.
We offer private, commercial and personal loans with very low annual interest rates as low as 2% in one year to 50 years repayment period anywhere in the world. We offer loans ranging from $ 5000 to $ 100 million.
Our loans are well insured for maximum security is our priority. Are you losing sleep at night worrying how to get a legitimate loan lender? You bite your nails that fast? Instead of beating you, contact Bob Lee Fast Global Finance Company (Loan Services) now, specialists who help stop loans bad credit history to find a solution that victory is our mission.
Applicants must fill out a loan application form below:
FORM credit application
loan applications
Your full name *
Your e-mail *
Your phone *
Your address *
Your city *
State / Province *
Country *
Date of birth *
Do you have an account? *
Have you applied before? *
The loan amount is needed *
The life expectancy *
The purpose of the loan *
Send me a scanned copy of your passport: *
Creditor: Mr. Bob Lee.
The lender Email:bobleefastglobalfinancecompany@gmail.com

Related Articles

- Advertisment -

Most Read

Heartwarming act of kindness by mystery woman sparks joy online

0
One woman in Qatar's act of kindness has circulated on social media. Qatar's online community have praised an unidentified woman for a charitable act of...

Subscribe to Doha News below!

To be updated with all the latest news, offers and special announcements.