Rents of old residential buildings and partitioned villas have fallen by 10 to 20 percent over the past six months with more people now opting for buildings with better facilities and services, say industry sources.
Real estate experts are expecting a gradual population shift from Doha to outside areas, as a result of massive government investment in developing areas.
“Oversupply and relatively low demand for old buildings in areas like Najma, Mansoura and Old Airport has led to a fall in rents by 10 and 20 percent. Majority of tenants are now preferring new buildings with good maintenance services and facilities,” Ahmed Al Arouqi, General Manager, Roots Real Estate and a real estate expert told this daily.
He said many people avoid old residential buildings for the fear that they can be demolished any time.
Land prices remain very high in Doha and very few plots are available for developers and even owners of those plots are not willing to sell them looking for better offers. This has forced real estate developers to invest in outside areas where land is available at relatively low prices, said Al Arouqi .
“Government is heavily investing in infrastructure projects and services in areas outside Doha encouraging investors , individual tenants and companies to move to such places,” he said.
Prices of land plots and ready-to-occupy buildings in Doha have increased within the past three years by more than 100 percent while prices of properties in outside areas have increased only by 20 percent. Now there is a chance for increase in the prices in these areas with the growing demand, said Al Arouqi.
“Of course there is slight decline in rents of villas and flats in some areas, ranging from QR 500 to QR1000 (per month per unit). This trend started from the middle of last year. In areas like Al Wakra there is an oversupply especially of offices and commercial spaces,” said the manger of a real estate brokerage agency.
“Affordable housing units, falling in the QR3,500-QR4,000 range, have seen a slight decline in rents, in particular the old buildings,” he added.
An official from a leading real estate company providing leasing services in different areas of Doha said oversupply and low demand apply to only some areas and companies.
“Our company which offers fully furnished villas and flats in vital areas of Doha has not seen any decline in rents and still there is high demand for our properties. However, there is over supply in outside areas but very few people are ready to move there because of work, children in schools and traffic problems,” he said.
Despite claims about oversupply, real estate giants like Ezdan and Barwa are still having a long waiting list of applicants.
“Such big companies give offers to customers making them more attractive to tenants than buildings and flats owned by individuals. These companies do not hike the rents frequently like small companies and individuals,” he said.
An official from Waseef, the leasing subsidiary of Barwa, said they had over 400 applicants waiting for their turn in each of the housing complexes. Some applicants fail to sign the contract because when their turn comes they find themselves tied up in other rental contracts or can’t be contacted as they have not updated their contact details. So they need to apply again or update their application and wait for their turn.