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Soaring rents dampen the spirits of expatriates

Atul Aneja

DUBAI: Soaring rents in Qatar and the United Arab Emirates are forcing a large section of the expatriate community, including its majority Indian population, to fight for its economic survival.

With house rents becoming unaffordable, few, even among the white-collar workers, can afford to bring their families to these Gulf States. Consequently, the population of ‘single’ expatriate employees is burgeoning.

“I am now looking for a job for my wife in Dubai so that we can together afford a one-bedroom accommodation,” says a supervisor at a flower trading company.

The rise of the expatriate male population in the Gulf countries and the sex ratio imbalance that it has caused have begun to have their social consequences. Authorities in many of the host countries are now discouraging bachelors to live in established residential areas.

A recent report by the Arabic satellite channel Al Jazeera says that one of the likely reasons for the exorbitant rents is the focus in most of the Gulf countries on the construction of luxury apartments or villas. Because of the high cost of these properties, home buyers incur huge loans.

At the end of the day, they realise that they can pay off their debts only by charging high rentals.

The Al Jazeera feature reveals that despite the heavy demand, nearly 2,000 homes are lying vacant in Qatar’s capital Doha. This is because landlords do not wish to lease this accommodation, out of fear that this will lower rents and affect their loan repayment capacity.

Another factor behind the high rents is that investors find it more profitable to sink their money in real estate projects.

The risk of investments in local stocks is still high and the rate of return on bank deposits is low.

Analysts point out that there are no short-term solutions to the problem. They say that large investments in less expensive middle income homes are required to bridge the huge demand-supply gap. Till that happens , newspapers in the region will continue to advertise the availability of ‘bed spaces’ for rent — a phenomenon where tenets take on rent, space that is just enough to sleep, in rooms, which are usually overcrowded with single expatriate workers.

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