Sign in Register
Posted On: 25 November 2008 08:51 am
Updated On: 12 November 2020 02:09 pm

Financial crunch hits construction in Doha

Paper Boy
Paper Boy
Discuss here!
Start a discussion
Even fall in cement, steel prices fails to boost realty sector DOHA If the global financial crisis has hit any sector really hard in Qatar, it is the real estate. In an ironical situation, construction work has either slowed down or even stopped at many places despite a sharp decline in prices of building materials such as steel and cement. “The price of steel, which shot up to QR 4,500 and QR 6,000 per tonne, depending on the diametre of the steel, just a couple of months back, has dipped to QR 2,400 and QR 3,000 respectively. Likewise, cement, which cost QR 50 and QR 55 per bag just a couple of months ago, has tumbled to QR 30-32 per bag,” a civil engineer of Al Aalia Construction company, who did not want to be quoted, told Qatar Tribune. Similarly, the price of ready-mix material which had shot up to QR 460 per cubic metre a couple of months back, has dropped to QR 440. Sand, which reportedly cost QR 120 per tonne in the black market, now costs QR 80 per tonne. The actual price of sand, however, is only QR 22 per tonne. “The price of electric cables has also witnessed a sharp decline of 30 percent recently,” the engineer said. The price of blocks had, however, remained unchanged, he added. Despite a fall in the prices of building materials, construction activity has slowed down as clients are delaying payments to contractors. And the delay in the payment has been caused by the crisis in the financial sector, which has led to steep fall in the prices of houses because of low demand. In the present circumstances, while the real estate developers are reluctant to take loans from banks at the existing interest rates, banks are wary of giving housing loans indiscriminately. One of the major impacts of the financial crisis has, however, been the steep fall in house rent. Landlords and middlemen are lowering house rents but there seem to be fewer takers as Doha remains dotted with housing apartments displaying the ‘For Rent’ label. Real estate agents as well as middlemen are making all efforts to attract tenants as the buildings remain unoccupied despite having been ready for occupation for several months. The monthly rent of a villa in Hilal area, for example, has fallen from QR 18,000 to QR 12,000. The rent of one-bedroom flat that includes a bedroom, a drawing-cum-dining room, a bathroom and a kitchen which was QR 6,000 to QR 8,000 just a year ago, depending on its location, has gone down to QR 5,000 to QR 6,000. The same one-room set comprising one bedroom, a bathroom and a kitchen which were leased out on a monthly rent of QR 2,500 to QR 4,000 in different localities of Doha such as Madinat Khalifa, Al Nasser and Najma areas sometimes ago are being rented out by middlemen for QR 2,000 to QR 2,500 per month, the sources said.