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Overbuilding Leads to Lower Rents in Doha

Rents to tank in two years, says expert
Web posted at: 8/10/2009 1:43:47
Source ::: The Peninsula / By MOBIN PANDIT

DOHA: One of Qatar’s most trusted real estate investment experts says he sees the rental market taking a massive beating over the next two years due to excessive housing supplies.

Currently, there are no less than 15,000 apartments ready for occupancy across Doha literally with no takers, says Nasser Mohamed Al Mansoory, CEO of Qatar Oman Investment Company, a listed entity.

And there are many housing projects in and around the city which are coming up and expected to be ready for uptake by next year, he told The Peninsula yesterday.

The population of the country, according to him, is already down from 1.9 million at the peak of the housing shortage recently, to around 1.6 million. “These are the latest figures. So, with so many people having left, where do you think the demand is going to come from,” wondered Al Mansoory.

Not only apartments, there are villas as well which are lying vacant all around. Little thinking has gone into these projects and that explains why there is suddenly a dearth of takers.

These are the units which are difficult to attract tenants on high rentals given the fact that supplies are excessive while the demand is limited. “We, therefore, expect the rents to come down,” said the CEO whose company actively invests in the real estate sectors in Qatar and Oman.

He said thoughtfully: “I wouldn’t be surprised if over the next two years (by 2010-11) you see the rents in Doha back to their previous levels to QR1,200 and QR1,400 monthly.” Already, two-bedroom apartments whose going rates were QR8,000 not too long ago, are now available for QR5,000.

“See the newspapers. Their classifieds are full of ads for all categories of vacant houses day in and day out, clearly signaling that supplies far exceed demand.”

Similar is the situation with office space, he said. Supplies are now abundant. The rates per square metre are sliding by the day. In the Old Airport area, next to a building where office space is available for QR250 per square metre, the going rate, for example, is QR160 per sq metre.

August 10, 2009 - Posted by | Building, Bureaucracy, Doha, ExPat Life, Living Conditions, Qatar

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