Do you think Rental price is going to go down after Asian Games?

from: http://www.lifeonthespot.com

It’s been past a year since we landed in Qatar and got ourselves a flat to live in. We’re paying QR4700 a month to live in a 2 bedroom unfurnished flat in a new building. I signed a contract for 2 years and gave the landlord 24 checks which he can encash every 3rd week of the month. I was thinking that maybe, as people usually say then, when the Asian Games have ended, rental for flats would go down dramatically and go back to circa 2003-2004. A 2 bedroom would cost 1500/month then while you can live in a villa for 3500. They even said that landlords then would offer 2 months free rental! I was asked by a friend in Saudi once how much renting a flat here costs and was so surprised with my answer. Coming from Saudi, even I found it difficult, at first, to cough up 4700 a month for a 2 bedroom flat wherein I was only paying SR12,000 a year for a big 3 bedroom flat in Saudi.

Everybody is hoping that since the Athlete’s Village (housing for 10,000+ athletes) is going to be vacated and reportedly going to be occupied by Hamad employees once the Games are done, there would be a large number of flats left unoccupied. Also, those employed for the Asian Games would return to their respective countries, paving way for more vacant apartments. The Law of Supply and Demand dictates that if you have more Flats and buildings unoccupied, rental for these should go down, right? I’m not too sure now.

Doha is growing and would continue to grow even after the Asian Games. Companies would continue to grow in numbers as well as the number of expats that they’ll employ. Yes, a lot of people have been moving back to their own countries or jumping to other countries that give them better value for their earned money but how many people are coming to Doha in return? Twice or even thrice the number. If you look at the websites of companies in Doha, you’ll find hundreds of job vacancies waiting to be filled up. Other than the continuous influx of people, landlords know that a lot of big employers/companies now are giving their employees higher housing allowances than last year. Though this is not to say that higher housing allowances gets you in a bigger and better housing situation. It just means that you can now somehow almost keep up paying the increases on the flat that the Qatari landlord is asking of you. The landlords, of course, couldn’t care less. If you don’t have the moolah to pay, someone who got employed at a bigger company may be able to pay what he’s asking for. I’ve heard of 2 instances wherein a vacated flat was up for bids and the “winning� bidder is now paying twice the amount in rent than of the previous tenant who left.

Even with a Qatar Law that stipulates only a 10% increase yearly, the landlords often get away with more than that. Not all landlords are made the same as some follow the law while some are as greedy as can be. Still, I don’t think any of them would be willing to slash the prices of rents in the near future. Also, I haven’t seen land property devaluate unless the area was hit by a calamity, became a disaster area or what not (not hoping for these anyway).

After a year of being here and looking at the situation, I do believe that whatever happens after the Asian Games, rental rates are not going down. Never. But I’m still keeping my fingers and toes crossed. What do you think?