HOUSING TROUBLE

Saturday, 20 July 2013 In Qatar, more than 80 percent of the population (that is the percentage of expatriates) lives in rented accommodation. And house rents, according to global benchmarks, should normally take up no more than 40 percent of a household’s monthly income. The average monthly salary in the country in 2011, the latest year for which official statistics are available, was QR7,401 ($2,033). This figure rose to QR9,177 ($2,521) in the first quarter (January to March) of 2012. The averages are based on data from Qatar Statistics Authority, which is now merged into the newly-created Ministry of Development Planning and Statistics. Official figures for average house rents are not available, but operators in Qatar’s thriving rental market say it is impossible to get even a small independent housing unit on rent within the limits of the sprawling Greater Doha for less than QR5,000. That makes up 55 percent or more than half of the average monthly salary (based on the first quarter (Q1) 2012 data) in a country that needs to woo expatriates in large numbers to work on its infrastructure development projects. A severe dearth of affordable housing, with rents of up to QR3,500 ($961), has left people in lower-middle income groups struggling looking for modest accommodation. Developers have focused entirely on building housing stocks within the city limits of Doha and in its far-flung suburbs to cater to people in upper-middle and high income brackets. The situation, particularly since the severe housing shortages caused by large-scale demolitions for beautification and development projects during 2004-08, has led to the emergence of a greedy class of middlemen. This exploitative genre of go-betweens has been taking villas on rent and partitioning them to carve out makeshift housing units to accommodate an increasing number of families desperate for a rented dwelling costing QR3,000 to QR3,500. Sources swear the outlawed activity is thriving with the blessings of some equally greedy property owners. Such dormitory-style pigeonhole homes carved out in flagrant violation of safety rules and without the necessary official approvals pose a big risk to the safety of the men, women and children who huddled in them. Current housing development schemes seem to be entirely ignoring affordable housing stocks, giving rise to talk in some expatriate circles that with the arrival of sudden wealth, Qatar doesn’t need foreigners in lower-middle income jobs. Reliable sources say that while the above argument is far-fetched, the fact remains that not many foreigners are willing to come here for technical jobs at the middle-income level, discouraged by spiralling house rents. Given Doha’s fast-changing skyline, the day is not far, argue sceptics, when only two categories of people would be left in the country: those living in upper-middle and high-end homes, and those at the other end of the social spectrum living in labour camps. Lower- and middle-income expatriate families may gradually be pushed out by soaring rents and inflationary pressures, leaving a vacuum in the local job market. THE PENINSULA =============== Real estate sales rise in Qatar Wednesday, 24 July 2013Doha: The volume of trading in real estate in sales contracts registered with the Real Estate Registration Department at the Ministry of Justice from July 14 to 18 reached QR1,756,399,209. The weekly bulletin by the Department of Real Estate Registration said the list of sales included lands space, a two-storey villa, duplexes, houses, apartment buildings, schools and shops. Most of the sales were registered in the municipalities of Umm Salal, Al Khor, Al Shamal, Doha, Al Rayyan, Al Za’ayen and Al Wakra. QNA Tougher times ahead for middle-income families Saturday, 20 July 2013 BY MOHAMMED SHOEB DOHA: According to the latest statistics, the average monthly rents for fully furnished apartments in the Al Sadd, Najma, Bin Mahmoud, Airport Road, Muntaza and Mansoura areas are QR5,300 for a one-bedroom unit, QR7,300 for a two-bedroom one and QR8,600 for a three-bedroom unit. Rents for high-end apartments in West Bay and The Pearl Qatar range between QR14,500 and QR15,000. Until March this year, monthly rents for three-, four- and five-bedroom villas ranged from QR11,000 to QR18,000, while high-end villas in West Bay and other localities ranged between QR18,000 for a three-bedroom unit to QR23,000 for a five-bedroom one. The near- to medium-term outlook on house rents remains strong, according to Tanween Quarterly Real Estate Market Report Q1 2013, in the backdrop of the exponentially increasing population. Following the launch of big-ticket metro rail, road and other projects, demand for furnished housing is growing, raising rents beyond expectations. Private companies are finding it increasingly difficult to provide accommodation to their senior staff, while many others, instead of providing housing facilities, prefer to pay an allowance to their junior white collar workers, ranging from QR3,000 to QR5,000. “My company pays only QR3,500 as house allowance, and until I managed to find a cheaper house I had to pay QR4,300 for eight months,” said Saqib Asghar Amani (not his real name), an electrical engineer working for an Indian company. “I took up this job in Qatar leaving Saudi Arabia with the hope of saving some more money as I was offered a better salary here compared to the previous company… I was aware that housing is relatively expensive in Qatar, but I didn’t know it would be so expensive that by the end of the month I would not be able to save even what I was doing in Saudi,” he added. He added that until he found shared accommodation for QR3,200, he was planning to return to his former employer in Riyadh or go back to Delhi as he was unable to save enough money. It was believed that once some well-known housing projects were completed the problem of affordable housing would be largely addressed. However, the situation continues to be a cause of concern for the authorities as well as private companies as more and more expatriates are arriving in the country following the launch of big projects. Some companies claim to provide affordable housing with attractive offers that include ‘rent holidays’ for up to six months, but given prerequisites such as advance cheques and formalities involving one’s employer, the situation for individual tenants remains indifferent. Real estate firms prefer to rent houses to companies for hassle-free business rather than deal with individual customers, which increases their overheads. Municipal rules such as those segregating residential areas for families from those of single workers and specified areas where only villas can be built, are also obstacles to increasing housing stock. “Demand for shared accommodation has become stronger, pushing monthly rentals up 15-20 percent compared to rents early this year. The rent for a one-room set with no dining space has increased from QR1,800 to QR2,200,” said a person involved in the subletting business, requesting anonymity. He added: “Day by day, demand for and rents of compound villas are going up, which will continue till 2022. Usually, during summer vacations, I used to struggle to rent out vacated flats, but this year there are no such problems. In fact, I am getting calls from people for houses but am unable to supply as this business has become very competitive due to large players and various other factors, and legal complications and risks involved.” Even labour camps have become very expensive, he said. “Places like Sanaiya, which lacks facilities such as markets and places to hang out, are high in demand. People lease out plots in square metres to build makeshift labour camps.” Another real estate developer, who is in the business for over 25 years, said rents for one-bedroom flats, which are now available for QR3,000, may go up to QR4,000 or more in the coming days. ===================== HOUSING TROUBLE Saturday, 20 July 2013 In Qatar, more than 80 percent of the population (that is the percentage of expatriates) lives in rented accommodation. And house rents, according to global benchmarks, should normally take up no more than 40 percent of a household’s monthly income. The average monthly salary in the country in 2011, the latest year for which official statistics are available, was QR7,401 ($2,033). This figure rose to QR9,177 ($2,521) in the first quarter (January to March) of 2012. The averages are based on data from Qatar Statistics Authority, which is now merged into the newly-created Ministry of Development Planning and Statistics. Official figures for average house rents are not available, but operators in Qatar’s thriving rental market say it is impossible to get even a small independent housing unit on rent within the limits of the sprawling Greater Doha for less than QR5,000. That makes up 55 percent or more than half of the average monthly salary (based on the first quarter (Q1) 2012 data) in a country that needs to woo expatriates in large numbers to work on its infrastructure development projects. A severe dearth of affordable housing, with rents of up to QR3,500 ($961), has left people in lower-middle income groups struggling looking for modest accommodation. Developers have focused entirely on building housing stocks within the city limits of Doha and in its far-flung suburbs to cater to people in upper-middle and high income brackets. The situation, particularly since the severe housing shortages caused by large-scale demolitions for beautification and development projects during 2004-08, has led to the emergence of a greedy class of middlemen. This exploitative genre of go-betweens has been taking villas on rent and partitioning them to carve out makeshift housing units to accommodate an increasing number of families desperate for a rented dwelling costing QR3,000 to QR3,500. Sources swear the outlawed activity is thriving with the blessings of some equally greedy property owners. Such dormitory-style pigeonhole homes carved out in flagrant violation of safety rules and without the necessary official approvals pose a big risk to the safety of the men, women and children who huddled in them. Current housing development schemes seem to be entirely ignoring affordable housing stocks, giving rise to talk in some expatriate circles that with the arrival of sudden wealth, Qatar doesn’t need foreigners in lower-middle income jobs. Reliable sources say that while the above argument is far-fetched, the fact remains that not many foreigners are willing to come here for technical jobs at the middle-income level, discouraged by spiralling house rents. Given Doha’s fast-changing skyline, the day is not far, argue sceptics, when only two categories of people would be left in the country: those living in upper-middle and high-end homes, and those at the other end of the social spectrum living in labour camps. Lower- and middle-income expatriate families may gradually be pushed out by soaring rents and inflationary pressures, leaving a vacuum in the local job market. ========================= A shortage of affordable homes Saturday, 20 July 2013 DOHA: An Asian expatriate in a middle-income job that pays him close to QR10,000 ($2,746) a month, tired of looking for an independent housing unit he could afford, had to eventually move into what was a make-shift living space in a partitioned villa compound in a working class locality of Doha. Living in a claustrophobic enclosure, in his own words, with little space for free movement for him, his wife and a child is less of a challenge than the fact that almost every month there is a fight with neighbours over splitting water and electricity bills. “This apart, the place is noisy all the time, but we can’t move into an independent apartment as that is far beyond our means,” says the expatriate with a sense of helplessness. An Arab family living for years in an old apartment in the Old Airport area of the city had to compromise its privacy and rent out a room to a working woman to be able to afford the rent the new owner of the building had suddenly increased. These are not scattered cases of middle-income families suffering, as the shortage of affordable housing in the country worsens amidst an influx of foreign workers that is becoming heavier by the day. Data released earlier by the Qatar Statistics Authority, the national statistics agency that is now merged into the newly-set-up Ministry of Development Planning and Statistics, reflect that in the five months between January and May of this year alone some 130,000 new recruits arrived in the country, taking the population to 1.96 million, from 1.83 million by 2012-end. In 2012 itself, the population grew 7.5 percent, or more than a 100,000, topping the annual targets set within the National Development Strategy (NDS) 2011-16. An idea of unplanned population growth can be had from the fact that while the target for 2013 was 1.78 million, by May itself, it had reached 1.96 million, and is expected to cross the two million-mark by year-end. As more and more foreign workers arrive in the country to engage in development projects being launched in preparation for the 2022 FIFA World Cup, the pressure on housing, as also on other resources, mounts. “Naturally, housing will be the worst affected as the demand grows and shortages take place, sending the rents spiralling,” says a real estate sector operator. Since many development projects are likely to be announced after the summer break, real estate sources expect a sudden influx of foreign workers in just a few months. And although a vast majority of them will be unskilled and semi-skilled workers who would be housed in labour camps, that are also in short supply and expensive, a small proportion would consist of skilled workers and professionals who would bring their families along and need housing. The situation is, thus, likely to turn worse especially as only 10,000 new housing units are expected to come on the market this year, again not in the affordable categories, as against an estimated 18,000 that were added last year. Some believe the growing population could turn the situation uglier than that during and after the 2006 Asian Games when acute housing shortages caused by large-scale demolitions in Doha for beautification and development projects led to multifold rise in rentals. Monthly house rents averaged at under-QR2,000 before the population began growing from 750,000 in 2004, to over QR5,000 now, (in 2013) when the population is nearly three times that. The fears of the rental market going out of control in a repeat of the nightmarish trend witnessed during 2006-08 are real for some despite the assurances given earlier by the country’s planning agency (the General Secretariat of Development Planning that is also merged into the newly-created ministry) that the situation wouldn’t be that alarming (due to the development projects being launched for the FIFA event). The GSDP had said while releasing inflation figures late last year, when it reported for the first time in four years since the peak of inflation at 15 percent in 2008, that rents had begun showing an upward trend. Last June, for example, the yearly inflation was 3.4 percent, and rising rents seemed to have had a major impact as they grew 6.8 percent year-on-year. The scepticism is largely among limited-income families who are not provided with free housing by their private sector employers and are instead entitled to rent allowance that is most of the time modest and below the prevalent market rent prices. Property sector sources say developers, post the 2006-08 housing shortages, have largely focused on upper-middle and higher-end stocks, including apartments and villas, and have entirely ignored affordable housing for expatriate families in lower-middle income groups. Ezdan and Barwa have built mass housing stocks for the above categories of expatriate families but the stocks are just not sufficient to meet demand. Ezdan, although it offers promotions like free rentals for a few months, one needs to enter into long-term tenancy agreements and provide post-dated cheques, said a real estate sector source. “This many expatriate tenants find inconvenient as they are unwilling to have long-term commitment.” So the shortage of affordable housing not only remains, it is becoming acute. While one can find with some difficulty a one-bedroom apartment in a working class locality in Doha for up to QR5,500, smaller units are not easily available in other areas. Two and three-bedroom apartments in new buildings in several areas of the city and its outskirts are common but their rents are high. Rents can soar up to QR15,000 in prime spots such as The Pearl and the West Bay, according to market sources. These (high-end apartments and luxury villas) are the housing stocks that mostly companies provide to their senior employees, including top professionals and senior members of their management. A severely lack of affordable housing has led to a mushrooming of villa compounds all over, mostly in and around Doha that cater to expatriate families in lower-middle income categories — those with monthly income of QR10,000. The makeshift pigeon-hole residential units in the dangerously partitioned villas pose severe safety risks to their occupants. Another trend in witness these days is that a large number of limited-income expatriate families that are leaving to spend summer vacations home, are giving away their rented houses — howsoever small — on temporary rent. The classifieds sections of local newspapers are full almost daily with advertisements by such families soliciting sub-tenants for one, two to three months. According to real estate sources, these are the tenants in limited-income brackets who are taking advantage of a void caused by the shortage of affordable housing and catering to those expatriates who are living here single and want their families to join them briefly during the summer break. Experts say that unless corrective measures are taken and developers focus equally on affordable housing, the rent situation might spin out of control in the years to come. The Peninsula Commercial retail space outlook DOHA: The outlook for commercial retail space is no different from residential units. Demand outstrips supply due to exponentially growing population. The gross leasable area (GLA) per capita of organized retail space (shopping malls) is much lower in Qatar compared to regional standards such as Dubai and Abu Dhabi. Despite many new malls coming up in next couple of years, asking rentals in these upcoming malls are 20 to 30 percent higher when compared to the existing rates, clearly reflecting a bullish market trend. By 2015 over 1.1 million square metres of additional retail space will be ready for commercial use, but owing to the rising population rentals are not stable. Currently, according to the latest figures available, the retail space supply in the organised sector is over 600, 000 square metres (sqm), and last year nearly 45,000 sqm of additional retail space came onto the market. The given figures do not include new strip or high-street retail delivered so far. Despite the future retail market being bullish, the current rentals, however, are relatively stable. According to the latest Tanween Report, rents for line tenants in malls have remained more or less steady for the past few quarters, in the range of QR200 -QAR 250 per square metres. And interestingly, strip retail rentals are 30 to 40 percent lower than rentals in malls. But analysts suggest that due to further expected growth in the population of lower and lower-middle-come people, there are opportunities for strip retail re-development in secondary business districts (SBDs). As far as the hotel sector market outlook is concerned, with the government targeting to attract two million tourists by 2015, the demand for high-end hotel rooms (four and five star category) is expected to dominate the market. The average occupancy rates in such hotels were higher in Q1 2013 compared to the corresponding period last year. Twelve new high-end hotels opened in 2012, delivering an estimated 2, 200 additional rooms to the market, and an additional 1,500 rooms are to be delivered during 2013. =====================