Rental costs soar in Qatar as construction costs rise

Rentals in Qatar are soaring in many areas as a result of construction costs and land values, The Peninsula has reported.

Rents of commercial space and residential units are expected to grow considerably in the coming months having fallen slightly over the summer period.

Market experts have noted that rental costs are no longer dictated solely by supply and demand gap, but increasingly on the basis of land value and construction costs.

Specifically, the paper said that construction costs have also increased by 20-30% over the past year.

In addition, rents of brand new residential and commercial units have already gone up by 25-50% in prime locations, due to the hike in land value and construction costs, the report added.

Khalifa Al Muslimani, a real estate expert, said rentals had gone up by 15% during the first half of 2014 from a year ago and have further increased by 5% during the past two months.

High construction costs and growing land value are the two major reasons for the uptrend in the rentals market, with increases of up to 70% in some areas, he said.

According to Abashir Mohammed, a real estate sales consultant, a notable trend in the rental market is that prices have been steadily going up the whole year without dropping a single month.

In some cases, the rentals have gone up by 50%, for both residential and commercial units.

“The market is really buoyant. The demand for housing units is very high at present,” said Ali Obaidily, Group CEO, Ezdan Holding.

“The rentals will steadily go up from mid-2015, when the market is expected to witness a fall in the supply side, especially with the launch of the execution phase of mega projects when the country will receive a large number of middle-level professionals accompanied by their families.”

Source: constructionweekonline.com | Photo: Damon McDonald in the QL FLickr group

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By christian34q• 17 Aug 2014 01:04

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By christian34q• 17 Aug 2014 01:03

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