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High rents brings Qatar realty market to a standstill
Rising rents in Qatar has led to a decline in the real estate activities in the country, with several new apartments lying empty, with no takers.
According to real estate sources, the low demand has however, not brought about a drop in rentals. The Peninsula had reported that there is a lull in the market, as people have turned more selective. Apartments are available across the city, but with few takers. Landlords are not in a position to reduce rents either, as they had heavily invested in the buildings.
The approximate construction cost of a double bedroom apartment is currently about QR1mn. Such an apartment now attracts rent in the range of QR8,000 to QR10,000. In case people opt to buy such an apartment, they try to accommodate maximum members in their apartment.
Another reason behind landlords refusing to reduce rent rates is that the new rent regulation has freezed rent hikes for another two years, and if the landlords reduce rents, they will not be in a position to increase it until 2010.
The mounting rent rates have compelled several residents to either send their families back home, or to go in for a shared accommodation. The drop in demand for apartments may also be attributed to the fact that there are lower numbers of professionals entering the country, compared to years ago. This, coupled with high inflation and mounting living costs have led to several job-seekers opting to stay away from Qatar.
“Most foreigners who enter the country are either unskilled or semi-skilled, and are not the ideal target customers for the new luxury villas and apartments,” say real estate agents.
In the meanwhile, landlords who had already entered into contracts before 1st January 2005, are increasing rentals, taking advantage of the new rent regulation, wherein a hike is permitted in such cases, depending on the rent amount.
However, ‘The Peninsula’ reports that the new regulation has made it very difficult for landlords to evict a tenant by force or tactics. An eviction can be served only by the court, and in most dispute cases, the court favors the tenant after the new regulation has been passed.
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