With the world's beautiful game bound for Qatar, the country intends to score goals before the first ball is even kicked by adequately accommodating visitors and selling homes to more rooted individuals, native and foreign.
Hydrocarbons giant Qatar boasts the world’s leading GDP per capita ratio, at USD63,222 in 2018, a huge 501% times the global average. Geopolitical turbulence notwithstanding, this attests to the purchasing power of its citizens, not to mention that of the expatriate and foreign contingent, now legally more advantaged in real estate investment. Add to this the panoply of projects being realized in the countdown to the 2022 FIFA World Cup, and we are talking footy-fueled construction boom, which, despite dips, promises sustained strength in the real estate sector.
A Bumpy Road It hasn’t been rosy all the way, and the 20.74% real estate price index rise of 2013 followed by the respective 34.67% and 14.39% appreciation of 2014 and 2015 was pronouncedly reversed in 2016 as real estate transactions tanked about 50%, with prices losing an average of 4%. Following the boycott by the Saudi-led coalition in 2017, real estate prices shed a further 9.9%, followed a year later by a 2.6% decline. Encouragingly though, the 1.56% YoY rise in 2Q2019 contrasted with the 16.6% YoY fall in 2Q2018, by Qatar Central Bank numbers. Yet 2Q2019 sales were rather meager, with residential transaction volumes down 14% YoY, somewhat negating the 20.5% rise of 1Q2019. The sector argues that deflated prices are partly behind encouraging upward movements in transaction volume. Unsurprisingly, the highest transaction prices remain in such prestigious schemes as The Pearl-Qatar, New Salata, Abu Hamour, and, of course, Lusail, the great hope for tomorrow’s Doha. Residential prices at time of print were, on average, around 10% down on the 2017 level. In the Pearl-Qatar, a used two-bedroom freehold apartment could be had for under USD3,570 per sqm, while new-build studio and one-bedroom flats in Viva Bahriya were going for north of USD4,394 per sqm as we went to print.
A Tempting Legal Climate Foreign citizens account for 75% of Qatar’s population by official numbers. Bearing this in mind, a potential catalyst for realtors’ commission earnings is the latest investment law that allows foreign citizens full company ownership without a local partner, which provided greater flexibility in purchasing real estate. While citizenship is not an option, the new legal environment delivers permanent residency for foreign owners of property with a minimum value of USD200,000 for the duration of ownership. Expats may borrow up to USD824,000 for a maximum of 15 years, usually with an average loan-to-value ratio of 70%. The preeminent local lender, Qatar National Bank, extends home and land financing at 3.5% interest. And what’s more, these individuals enjoy the same benefits as Qatari nationals regarding healthcare and education, as well as priority after citizens, for public sector work. In March 2019, Law No. 16 of 2018 raised Qatar’s number of freehold residential zones from three to 10. This has increased the range of possibilities added to existing residential staples such as The Pearl, a technical marvel in itself for being located on a man-made island off the coast of Doha. It features 16,000 villas and 25,000 apartments. Currently there are also 16 leasehold zones available to foreign citizens offering deals of up to 99 years. These zones include the colossal Lusail project, and foreign nationals are at liberty to utilize property commercially or residentially, as well as transfer the lease to another party, sublet, or rent. Such legal reforms confirm that the government has prudently compensated for the intended financial damage of blockade. Qatar’s real estate sector hasn’t enjoyed plain Lusail-ing, so to speak, though lower prices combined with greater investment opportunities make it a viable proposition.