Has the time come to regulate Qatar's real estate market?
The recent call by the Central Municipal Council (CMC) to ban sharing of single housing units by expatriates stresses the need to further tighten real estate regulations in the country. Some CMC members have expressed the view that the partitioning of villas by “sub-agents” has become very common, violating the already applicable legislations in the country. A well-regulated real estate market will benefit both investors (property owners) and customers alike and contribute to the national economy. The business strategy of investors is clearly driven by the projected return on investments (ROI). Obviously, return on investments is decided by the demand – supply situation.
Currently, there is no major shortage for housing units in the country due to abundant supplies coming in to the market. But for many expatriate families, the rents quoted are still not affordable. By regulating the real estate market and fixing rent based on criteria such as type of units, building life, facilities provided and location will benefit customers. Probably, this will create a situation, wherein, there is no need for sharing single housing units in the country. Many employers in Qatar are providing decent accommodation or generous house rent allowance to their employees. Employers can certainly help stabilise the real estate market by facilitating “fair deal” between realtors and their employees. Importantly, no unauthorised person must be allowed to sub-lease commercial properties or villas and apartments. By avoiding middlemen, fairness comes to play, providing optimum benefits to building owners and occupants alike. It must be noted that efforts made by many real estate companies, including Ezdan and Barwa, have brought in lot of stability to the market. They entered the market at the right time and invested in thousands of affordable housing units across Qatar, which have come as a big relief to many lower-income families, mostly expatriates.
They have clearly set an example for others to follow. With Qatar economy witnessing rapid growth and many infrastructure projects being taken up, national economic prospects look good. Population growth has been accelerating mainly because expatriates come to work on new infrastructure projects. The number of people living in Qatar grew by 11.4% year-on-year in December 2013 to reach 2.05mn, QNB recently said. Population growth in recent months has been driven by the large ramp-up in infrastructure spending in preparation for the 2022 FIFA World Cup. Many analysts believe this may eventually put pressure on both commercial and residential properties with the result that rents may go up considerably. “The fundamental driver for real estate prices is the cost of land. If land prices rise, the price for villas, apartments and other real estate prices are likely to go up,” QNB said. A recovery in land prices in December and January 2013 could reverse the slowdown in rent inflation by mid-2014, QNB said.
Although the property market is not red hot yet, effective measures will continue to ensure stability, benefiting both investors and tenants. Investors must have decent returns, tenants should find rents affordable. Disputes, if any, must be resolved on a fast-track.
- How to avoid turning your dream home into a nightmare
- The Kingdom will sure 'look different' by 2030: Saudi Arabia has 80 mega-projects up its sleeve
- Too pricey? MENA property hikes are off-putting for new buyers
- Fleeing war? UAE is the safe haven: Dubai property market is safe and secure according to a top banker
- CEO of the UAE's top developer, MAF Properties talks money and retail