Fifty percent of respondents to a survey conducted by Al Sharq Arabic daily on whether house rents have come down, say the rental market has indeed eased.
But 45 percent of the interviewees said they did not see any drop in rents, while the remaining five percent said they could not say either yes or no.
The daily referred the findings of the survey to real estate experts and observers who said since a number of new residential units had come up in the country over the past months, the rents were actually coming down.
But there are some property owners who are still holding on to their newly-built housing stocks, not willing to compromise with the changes taking place in the market.
“They still believe there is immense demand for housing, as it existed in pre-recession days, so they think they can rent out their properties on rates of their asking,” said Ahmed Al Khalaf, a prominent businessman who is a keen observer of the estate market.
There is another category of property owners who have accepted the changes occurring in marketplace and they have rented out their properties on prevailing rates, he pointed out.
Land has also become cheaper. And as families occupying old houses have moved into new homes the supply has increased and it now far exceeds demand, according to Al Khalaf.
He said due to the easing of the housing shortage, a large number of landlords were now not insisting that tenants raise rents by 10 percent annually. “They are realistic people and appreciate market forces,” Al Khalaf said, describing the landlords pragmatic.
But another businessman and observer, Yaqub Al Ibrahim, warned that the easing housing and rent situation should not be misread as resulting from a yawning gap between supply and demand.
“It is a result of the global financial crisis, so there is no need for people to be so optimistic about the rental market having stabilised over the long-term,” said Al Ibrahim.
Al Khalaf, on the other hand, said that given the way rents shot up in the recent past, the government must establish new residential areas to stabilise the situation over the long run.
This should be done, especially considering that skyrocketing rents impacted the entire national economy adversely and contributed to the hike in the prices of almost every conceivable commodity or service, he added.
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