The real estate market in the country is witnessing a lull with several new apartments lying vacant as there are no takers due to the high rents.
Real estate sources, however, say the low demand has not resulted in a fall in the rentals.
“There is a lull in the market as people have become more choosy. Apartments are now available across the city, but there are few takers. Landlords are not in a position to reduce the rents since they had invested heavily in the buildings,” an official of a leading real estate company told The Peninsula yesterday.
The exorbitant rents have forced a large of number of residents either to send their families home or opt for a sharing accommodation.
“The estimated construction cost of a two-bed room apartment is around QR1m. It is now available at rents ranging from QR8,000 to QR10,000. If at all people are opting for such flats, they try to accommodate as many members as possible,” he said.
The fact that the new rent law has put a freeze on rent hike for two years is also preventing landlords from reducing the rentals. If they reduce the rents, they would not be able to raise it until 2010.
The decline in the demand for apartments is also attributed to a lower number of professionals coming to the country, compared to a couple of years ago. The high inflation and the skyrocketing cost of living have forced several job-seekers to look away from Qatar.
“A majority of the foreigners coming into the country are unskilled or semi-skilled workers and they are not the ideal customers for the newly constructed villas and apartments,” said the agent.
Meanwhile, several landlords with rental contracts signed before January 1, 2005, have been raising the rents, taking advantage of a provision in the new rent law. The law has permitted a hike in such cases, but up to a limited percentage that varies according to the rent amount.
The sources, however, said that the new law has made it extremely difficult for landlords to forcefully evict a tenant. “An eviction order should be served by the court and in most cases the court is favouring the tenant after the new law," said the sources.
I say it's good, let there be so many houses that people are FORCED to drop the rent. In return construction companies would be forced to drop prices etc... There are TOO many luxury apartments and developments. Some people just want high quality but normal facilities. As people can see by the article, tenants are also favoured now.
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