By Santhosh V Perumal/Business Reporter

Rents in Qatar's residential market are poised to increase further due to the “considerable” expansion in the blue-collar workforce and on “limited” supply of new villa compounds, according to Al Asmakh Real Estate Development Company (Aredc).

Due to “considerable” addition of educated and blue-collar workforce, demand for residences has been continuously rising, a report from valuation and research department of Aredc said.

The insistence of professional expatriates, across all income brackets, to live together has led the “demand for housing stretch over all kind of rental properties”, it said.

Majority of the expatriates prefer to stay in apartments, therefore these dwelling are the most in demand with Doha municipality remaining the most popular area for renting apartments.

West Bay and The Pearl are predominantly high-end apartments catering to the affluent; whereas areas around C-Ring Road offer mid-rental and Doha downtown offers low-rental apartments, the report said.

“Qatar rental market has space to grow, so the rental rates,” it said, adding a 2BR apartment in The pearl and West Bay is available at a monthly rental of QR14,000 to QR18,000; while in Al Sadd, Msheireb and Bin Mahmoud, it is available at QR7,000 to QR12,000.

A 3-BR apartment could fetch a monthly rent of QR8,500 to QR19,000 depending on the location and amenities of the building, it said.

Highlighting that ever since 2010, the year-on-year apartment rental rate increase has been 7% to 10%; Aredc said “at present, we notice significant undersupply within in residential real estate market; hence we anticipate this upsurge will continue for the upcoming quarters.”

Finding that the affluent segment of professional expatriates prefer to stay in villas, especially those in well-managed compounds, it said both standalone and gate community villas are in demand and have their own demographics of tenants.

“Despite a year-on-year 5% to 8% rental growth in villas, the occupancies in villa compounds remain as high as 90% and in standalone up to 70%,” it said.

Al Waab and Duhail are considered premium over other areas of Qatar, even as demand is equally stretched across Doha and extended to neighbouring areas as Al Rayyan, Umm Slal, Al Wakrah and Al Khor, it said.

Finding that the preference of location is based on the rents, the report said villas in Al Wakrah and Al Khor are mostly taken by larger-size household with budget constraints while those in Al Waab and Duhail by small to medium-size families with larger rental budgets.

The remaining areas such as Abu Hamour, Madinat Khalifa, Gharaffa, Al Thumama, Nuiaja and Al Hilal accommodate all segments of occupiers.

The demand is seen higher for 3BR and 4BR villas with a 4BR villa in Al Waab fetching an average monthly rental of QR16,000; whereas similar size villas in Al Wakrah is available at QR10,500; thus offering wide range of choices to suit each class of household.

“The supply of new villa compounds is limited, which amplifies the year-on-year demand basis on the rental rates,” Aredc said, adding the bottom line is that Qatar rental market has space to grow.