Qatar, whose capital Doha was once known for pearl fishing, is the wealthiest country in the Arab world. With a per capital soon to be said to overtake that of Switzerland, it has been strongly present in the map of the world energy market. Today, Qatari economy is growing towards further diversification from mere oil and energy. Its newly launched financial centre, Qatar Financial Centre is becoming strong rival to those in Bahrain and Dubai. For many, Qatar-watchers, it comes with no surprise to hear that Qatar is rapidly gaining attention among the global real estate investors. Former pearl-fishing capital Qatar is now about to shine as a pearl of Gulf real estate market.
Qatar real estate market is heating or rather call it "booming". The Qatari Real Estate property show held in May attracted over 20,000 visitors from all the Gulf countries. This shows a strong potential of significant growth in Qatari real estate market. Key driver for this is namely expansion of oil and gas industry.
Surprisingly, as opposed to the strong demand, supply-side seems to remain tight. Reasons for this are high cost of raw material /construction cost and regulations. Therefore, some estimate that the demand is exceeding the supply by the factor of four. Although the real estate supply is yet to grow in quantity, as we start to look more carefully, we will notice that the quality is certainly there.
Background of the country
Ruled by His Highness Sheikh Hamad bin Khalifa Al Thani, Qatar is a peninsula bordering the Persian Gulf and Saudi Arabia with a history that extends for more than 4000 years. This thumb-shaped small state is 11,437 sq km in size and comprises a number of islands including Haulul, Sheraouh, Al Besharriya, Al Safliya and Aaliya. It has population of 600,000 with most of whom reside in its capital, Doha.
Qatari people are proud to call themselves traditional, loyal and ambitious. They have a strong respect for their beliefs and take pride in the country's history and culture. Although being traditional, Qatar has been very open and liberal to a drastic economic development and modernisation as well.
Since the mid 1800s, Qatar has been ruled by the Al Thani family and has been independent since 1971. When His Highness Sheikh Hamad came to power in 1995, he has decided to take the state into a new era of modernisation which drastically progressed Qatar in stature and wealth.
Infrastructure investments
Like many other countries in the Gulf region, Qatar puts significant effort in investing in infrastructure developments. The government has announced to invest US$150bn in its infrastructure over the next five years. Along with this, key public sector projects are in the pipeline to support the real estate sector growth.
In fact, Qatar is fully aware of the shortage of residential property supply and seems to be eager to establish a stable, long-term growth-oriented market to accommodate with all types of property.
As a result of this, many projects have been launched which complement each other in a sophisticated manner. Those new projects have a reputation to have been in a high-quality environment. That doesn't say that other components are forgotten, as there are many projects covering campus-style office space, golf courses, amusement spaces and luxury hotels. Qatari market is going to be offering a full range of products.
Freehold ownership and demand
"Qatar economy is booming, however due to the increased raw material costs, new construction regulation change, and many other reasons, the supply side is not keeping up with the increased demand for residential properties." A Qatar-based real estate agent, Ab Sher from Mirage explains about the current situation. However, he also stresses that this is not discouraging investors from looking at the market.
Main buyers of properties in Qatar is said to consist of two different groups, "buy-to-let" investors and home buyers. The former are dominated by the locals, namely Qataris. Interestingly, an increasing number of women are participating in this property investment boom as they are becoming more independent. The latter group consists of mainly expatriates moving in to the country after rewarding career opportunities in the field of energy, construction/real estate and financial sector. Competitive mortgage rate is one of the factors to accelerate purchase of their dream home. Many consider that rather than paying around US$2000 to US$4000 a month for a single bedroom, they would pay mortgage back.
However, one of the obstacles for expatriates and foreign investors is the limited freehold properties. In 2004, the government passed Law 17 which allowed foreigners to own outright residential property in limited number of developments, such as the Pearl-Qatar, Al Khour Resort and Lusail. Although there are only a few places to invest in, these three are all astonishingly "mega" projects.
The Pearl - Qatar
The Pearl-Qatar is a multibillion dollar project, a string of offshore islands with two circles which will feature harbours like a mirror-image of the natural shape of Doha harbour. This multi-building project will have an entire area of nearly 4 million sq m and create over 32 km of new coastline.
Located 350 metres offshore of Doha's prestigious West Bay District and only 25 kilometers away from Doha International Airport, this project will be home to over 40,000 residents in more than 15,000 dwellings within 12 inspiring precincts by 2010. The project is Qatar's first international real estate venture and one of the largest and the most expensive real estate developments of its kind ever undertaken in the country. In addition, this island is the first development in the region to guarantee 100% foreign ownership of the actual freehold property.
The up-market, multicultural residential community offers residents a secure and exclusive island retreat which brings the ambience and lifestyle of the Mediterranean to the heart of the Gulf. With its beachfront villas, elegant townhouses, luxury apartments, exclusive penthouses, five-star hotels, marinas, schools as well as high-quality retail, restaurant, cinema and lifestyle amenities, the island is the location of choice and benchmarked by the very best. The developer calls this "a lavish, secure and exclusive island retreat with a Riviera-style design and spirit".
The main concept of the development is to bring the ambience and lifestyle of the Mediterranean to the heart of the Gulf. The three marinas to be built here will be big enough for 800 boats. The island will be splendidly beautiful with canals, lakes and interior navigable coves. The yacht club here will be catering the international, regional and local yachting community, and will be an exceptional centerpiece for residents and visitors to the island.
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