Coping with numbers

January 05, 2013 - 2:27:20 am

Currently, housing supplies exceed the demand, but real estate sources say the equation may reverse by the end of the year.



Planning authorities in Qatar estimated the country’s population would inch up to 1.76 million by the end of 2012 (up from 1.73m in 2011), but it actually rose to 1.83m, according to figures released by the national statistics office.

The gap between the estimate and the actual population — a huge 70,000 — has led to fears that the country may not be ready to handle the pressure an increasing population will put on basic infrastructure — housing, hospitals, roads, food, electricity and water.

Some experts believe the population might explode beyond the two-million mark by the end of 2013, against the projected estimate of barely 1.78m, as a slew of mega development projects lined up for launch this year may see a large influx of foreign workers.

Even if 90 percent of the newly-arriving workers are semi-skilled and unskilled, who would need to be housed in labour camps, the remaining 10 percent would be skilled workers and professionals who would be bringing along their families and needing regular housing.

 And that might send house rents, if not food prices, spiralling in a repeat of 2006-08, when housing shortages saw rents scale unprecedented heights.

Currently, housing supplies exceed the demand, but real estate sources say the equation may reverse by the end of the year. The situation might be compounded by the fact that construction companies are focusing their energies on bagging lucrative contracts in the development projects, leaving the housing segment to the smaller players.

The smaller companies seem hesitant to enter a market they feel is saturated by excess housing supplies, and they also want a share in the government contracts (read subcontracts).

That, according to analysts, can make the situation worse as rising demand and lack of new stocks could lead to shortages. “This is just one — and remote — possibility considering the rate at which the population has been increasing,” said a real estate sector source.

Others believe the present housing stocks are enough to cater to a population increase until the end of 2014. However, they add that since most vacant stocks are either upper-middle or high-end, there could be heavy pressure on affordable housing, pushing up rents.

The General Secretariat of Development Planning has indicated that rentals have begun rising again after plummeting from their 2006-08 peaks, and said 2013 could witness a further rise.

As a solace, though, the planning authority has said that the chances of the rental market witnessing a repeat of 2006-08 are remote.

THE PENINSULA
 
comments powered by Disqus