Rents of upscale apartments fall due to large supply and low demand

Burgeoning house rents in Qatar have been a constant gripe for people living in the country. After several years of higher rents, there finally seems to be a trend reversal happening now.

The Peninsula reports that rents of most high and middle-end residential villas and flats in the country have fallen by 10% to 20% due to oversupply and relatively low demand in the market.

But it seems like the trend is yet to affect lower-end, affordable housing units. A significant fall in rents is not visible there due to stable demand.

The decline in rents has been attributed to a lull in the market during summer, coupled with the exit of several expatriate workers from the country, who have lost their jobs in recent months. Many expatriate families have also left the country recently.

“There’s a decline in building rents in the residential sector by 10% to 20%. Currently about 9,000 housing units are vacant in the market, awaiting customers. There’s oversupply in the market and demand is low,” Khalifa Al Maslamani, a Qatari real estate expert, said.

A villa that was earlier rented out at QR15,000 a month is now available at QR11,000. But affordable housing units, falling in the QR3,500-QR4,000 range, have not seen any noticeable decline in rents, he said.

Despite an ongoing crackdown on partitioned villas, such facilities exist in the market and are in high demand as they cater to the low- and middle-income segments, including single workers.

Al Maslamani said there is more demand for commercial properties compared to residential units. He pointed out that with the current supply-demand equation in the market, it is nearly impossible for landlords to impose a further hike in rents in new tenancy contracts.