Home builders in Qatar are unable to keep pace with the country’s rapidly growing population, leading to housing shortages and rising rents, new reports show, Doha News reported.
Research by Qatar-based Al Asmakh Real Estate Development found residential rents increased five to 10 percent in the first three months of the year. A separate report by Colliers International puts the average increase slightly lower, at four percent.
According to the two companies, market forces are set to put further upward pressure on rents in the coming years as demand for housing outpaces supply, the website reported.
Colliers estimated 22,000 new homes will be constructed by 2018, adding to Qatar’s existing housing stock of 122,000 units.
However, demand for housing is set to reach 266,000 units – excluding labour camps – over the same timeframe, a 122,000 shortfall.
“Doha’s residential real estate market will continue to remain significantly undersupplied over the next five years,” Colliers said.
Despite these increases, average rental rates are still below the peaks reached in 2008 before the global financial crisis hit the Gulf and sent property prices plummeting.
According to Al Asmakh, high-end three and four-bedroom villas in Onaiza and Al Waab rent for QR18,000 ($4,944) a month, while similar-sized villas in Madinat Khalifa, Gharrafa, and Al Hilal are slightly less expensive, at QR13,000 to QR15,000 a month.
The firm found that average rental rates for two-bedroom apartments were QR15,500 in the Pearl-Qatar and QR14,500 in West Bay. Two-bedroom units average QR8,000 in Al Saad and QR7,500 in Old Airport.
Meanwhile, a government crackdown on illegally partitioned villas was likely to exacerbate the shortage, with inspectors stepping up their enforcement of laws prohibiting unauthorised modifications of homes.
Al Asmakh’s report also raised questions over whether there is enough accommodation for low-income expats amid predictions Qatar needs to recruit another 500,000 workers to construct the buildings and infrastructure projects leading up to the 2022 World Cup, Doha News reported.
The government estimated the country’s population would surge 15 percent in 2014 alone to reach 2.4 million residents.