It would be a mistake to regard the GCC housing rental market as homogenous. Different factors are in play – particularly the extent to which expatriates’ ability to buy freehold property have affected rent levels. Bahrain, Kuwait and Oman are still regarded as comparatively reasonable, while Qatar and the UAE, particularly Doha and Dubai, have seen steep rises. In Saudi Arabia, the picture is skewed by the high proportion of communal expatriate living.

In Qatar, several factors combined to create a sudden supply-demand mismatch in mid-2004. Consumer price index (CPI) data for the end of September shows that while the broad cost of living rose by 10.7 per cent from the previous year’s figure, the rent, fuel and energy basket, dominated by housing costs, had risen by 31.9 per cent. Price increases in 2005 were even higher.

‘Everything is so expensive here now,’ says Maureen Lord, manager of Apollo Enterprises’ property division in Doha. ‘Demand has [temporarily outstripped] supply, with the arrival of the US armed forces, the oil and gas sector’s rapid expansion and preparations for the Asian Games. Everything’s happened so fast there’s a shortage of accommodation. We hope the situation will stabilise next year.’

Lord says 2,000 apartment blocks and compound villas are being built, but completion is not expected for some time. In the meantime, rents have soared: a two-bedroom apartment has gone up from QR 3,000 ($825) a month in the summer of 2004 to QR 7,500 ($2,060) today; a three-bedroom villa has more than doubled from about QR 5,000 ($1,375) to QR 12,000 ($3,300).

‘Where Asian families were finding it difficult to live as a unit here, now it’s happening to British people. They can’t get their children into school; there are not enough schools. That’s another crisis. They are going for flats, which are now running short, because they cannot afford villas,’ Lord adds.

Unilateral increasesIn Abu Dhabi, it is difficult to find a two-bedroom apartment for less than AED 75,000 ($20,400) a year, says Maria Tessaro of Sherwoods Property Consultants. ‘Rents are becoming more expensive, without any doubt,’ she says. ‘In the last two years, they have gone up by 10-20 per cent. When people come to renew contracts, they often find unilateral increases from landlords. Previously, you could negotiate a reduction, but suddenly, that wasn’t the case.’

Vicky Feitelberg of Cluttons Chartered Surveyors & Property Consultants in Muscat says commercial rent prices in the Omani capital have risen dramatically over the past 15 months. ‘There’s definitely a shortage of quality office space at a reasonable rate,’ she says. ‘Decent office space now costs RO 5 [$12.80] a square metre in Kurum and Dubra, up from RO 4 [$10.25]. In Khuwair, office space costs RO 7-12 [$17.95-30.75] a square metre.’

In Saudi Arabia, short-term rentals are becoming more prevalent as landlords seek to avoid defaults, and were very high during the Hajj season in Jeddah, Mecca and Medina. Riyadh’s rents are also increasing. Rental cost for a two-bedroom apartment is about SR 18,000-35,000 ($4,800-9,350) a year, depending on location, building type and age. Richard Wood, an official at the British Trade Office in Al-Khobar, says safety has been a major concern. ‘All Western expatriates live in heavily guarded compounds,’ he says. ‘Ours has 360 villas ringed by the National Guard. The last major terrorist attack took place on the US Consulate in Jeddah in December 20