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Wednesday, February 18, 2009

Falling Rents

All the stories in the papers today have been about falling rents in Qatar. There have been several reports predicting falls, with predictions ranging from a 10 to 25% decrease in rents.

For everyone apart from landlords this will be a huge relief. Rent price increases had increased by over 100% between 2005 and 2007, and landlords generally found ways to get round limits on rent increases imposed by the government.

While owners could protest against rent increases, or even take landlords to court, there was nothing to stop landlords evicting the tenants a few months later because the property needed renovation.

Indeed, when one friend was asked to move out of her house so that it could be 'renovated', she realised that the issue was the rent - which, to be fair, was by then very low compared with surrounding properties.

Reluctant to leave a house which had been her home for two decades, she approached the landlord directly and offered to pay increased rent - an offer which was accepted.

Her house wasn't among the most expensive. At one point prices seemed to increase every month - and some large villas are still going for well above the QAR20,000 mark.

It's not unusual to hear expats who have been here a few years to moan that they could easily have bought a house for the rent they have paid over three or four years.

These high prices triggered speculation in real estate - and a bubble. However, that bubble has well and truly popped now, with land prices in some areas falling over 30% in one month alone last year.

What's more, further downward pressure on prices is likely to be maintained with 9000 apartments due to come on line by 2009.

Also see:

Huge Falls in Rent Predicted | Qatar Property Articles

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