Qatar rent prices could continue to plummit
The rents are likely to fall as supply in the residential rental market is set to continue to exceed demand
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A top official of the General Secretariat of Development and Planning has said that house rents may decline further in Qatar because of supply exceeding demand.
Talking to Qatar Tribune on the sidelines of a press conference organised to release the Qatar Economic Outlook (QEO) 2012-2013, Director of the Department of Economic Development at GSDP Frank Harrigan said, “The rents are likely to fall as supply in the residential rental market is set to continue to exceed demand.” Harrigan added, “Another reason for the possible fall in housing rents is the composition of Qatar’s population, which will consist mostly of the unskilled and semi-skilled people coming to the country in the near future because of intense construction activity.” It is worth mentioning that according to the QEO 2012-2013, Qatar plans to invest $130 billion in infrastructure sector between 2012 and 2018 and 10 percent of the GDP, approximately $39 billion infrastructure and total project disbursements by the end of next year.
Describing delivery of infrastructure promptly at right cost as a major challenge, Harrigan hinted at the possibility of increase in raw material prices, which could affect project costs in Qatar. He, however, added that the Ministry of Municipal Affairs and Urban Planning was taking necessary steps in this regard to deliver the projects on time, at projected cost and to the specifications.
“The Ministry is taking every step to ensure that the infrastructural projects are planned well and their completion and delivery to the clients are synchronised in a way that people do not face inconveniences of sorts such as tunnels dug up here and there”, Harrigan quipped.
According to Harrigan, the knock on effects of project spending on income and demand in the rest of the economy will be dampened by large leakages in the form of imports of materials, and capital goods as well as remittances of wage and other income.
According to the outlook, the other challenges faced by Qatar in the new scenario as the country switches to non-hydrocarbon economy were lifting productivity and removing obstacles to private sector development as well as bringing about improvements in institutional and human capabilities.