House rents are expected to dip sooner than later as real estate prices have already come down by almost 30 percent due to the world economic meltdown, a top industrialist told The Peninsula yesterday.
Abdul Hadi Al Shahwani said the global financial turmoil has led to decreased liquidity which has, in turn, pushed property and building material prices down. “Real estate prices have, in fact, declined by a huge 30 percent since the crisis began brewing.”
It is only natural to expect the rents to stabilise and subsequently fall. “There are already signs of the rental situation easing. A major indicator is that there are no immediate takers for ready-for-occupancy properties. Owners have to wait for one to two months before a tenant is willing to move in,” said Al Shahwani.
An official from a real estate agency, though, said the housing supply situation had begun easing but the number of units available for occupancy still remained far too less than the demand.
The rent situation should be clearer from January onwards, suggested P N Baburaj. “The rents should begin falling but only from January 2009 since house-hunting by potential tenants is usually uncommon during the lean months of November and December.”
He said since oil prices were sliding, companies engaged in the energy and services sectors may put plans to hire more staff on the back-burner. This could hit the demand for new housing, so rents may fall
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