Everyone knows that there is low demand and an oversupply of residential units in the market at present.
While real estate companies have refused to blink so far, industry experts feel they will have to give in sooner than later and decrease rents, reported The Peninsula.
So far, companies have refused to reduce rents and instead come up with schemes like ‘live rent-free for the first six months.’ This has helped them retain some tenants ands survive in the market.
“Supply of housing units has surpassed the demand. Owners of buildings will have to reduce rents by 20 to 30% due to low demand,” said Khalifa Al Maslamani, a Qatari real estate expert on a popular talk-show on Qatar TV.
He pointed out that it is economically sound to reduce rents to attract customers than keeping the units vacant.
He suggested that an apartment being rented out at QR8,000 per month should be made available at QR6,000. And rents in high-end category properties, ranging from QR20,000 to QR25,000 per month, should be slashed to QR15,000 to QR16,000.
Abdul Rahman Al Najjar, Deputy CEO of SAK Holding Group, said they were not decreasing rents, but coming up with new plans to make the most of the situation.
“We’re not competing with our rivals in reducing rents . However, we do offer free occupancy for two, three and in some cases six months. We’re also competing in providing better services.
“The rents have declined significantly in various areas. These days, there’re no more increase in rents like it used to be in the past,” he said.
Falling oil prices have had a huge impact on real estate properties. Land prices have fallen by about 25 to 30 percent in general and up to 50 percent in some areas.
The least affected is the residential segment with a fall in rents by about 15 to 20 percent. Rents of office spaces have fallen by about 50 percent due to over supply.[Qatarliving]