Real estate sources are claiming that the recently-introduced two-year freeze on rents in Qatar has prompted some landlords to unreasonably raise the rentals for new tenants.
The rent law has been effective in curbing rent rise in general, but several landlords are fleecing new tenants to compensate their losses and attempting to cash in on the continuing shortage of residential and commercial properties in the local market.
“Landlords are now not permitted to raise the existing rents nor terminate the contracts as they wish. They would face a similar situation once they sign contracts with the new customers. Knowing well that they would not be able to further raise the rents until 2010, many of them are trying to hike them in advance. The law has not put any limit to the rents in case of new contracts,” said an official of a leading real estate company based in Doha.
He said his real estate company has recently rented out a two-bed room villa in a housing complex in the city for QR17,000 per month, nearly 50% more than existing tenants are paying.
Most tenants have no alternative but to accept the high rents, due to a shortage of residential properties. Many new buildings are coming up in the city but they are still not adequate to meet the high demand from newly-recruited professionals, most of them are employed in the oil and gas sector.
“Considering the huge number of development projects coming up in the country, this shortage is expected to continue for another two or three years at the least. Competition is not likely to bring down prices in the real estate market, since there is no uniformity in the product or the prices,” he added.
Another real estate agent said the market is now facing a “standstill” after the new law came into force. He, however, confirmed that some landlords are trying to hike the rents for new tenants.
But the real estate market in Qatar traditionally slows down in the summer, so we will have to wait for September to get a clearer picture. Qatar, like Abu Dhabi and Dubai, is facing serious public housing issues, and this rent freeze was an attempt to address that issue. It seems some landlords will do anything to avoid it though.
