It is not exactly like an expatriate can pick up property anywhere in Doha, now a bustling capital city and a far cry from the backwater it was a few decades ago, until oil and gas riches transformed the place. Now, expatriates who want in on a slice of the Qatar property pie, can buy real estate, although the process of going about it can be rather convoluted, with myriad clearances and permissions required.

Pearl Qatar - Freehold area for buying property in Qatar
Pearl Qatar – Freehold area

According to head of strategic consulting, MENA, Jones Lang LaSalle, Deepak Jain:Since the passing of Act No. 17 issued in 2004 permitting non- Qatari citizens to utilise real estates and residences, only few expatriates have decided to purchase units.

This is mainly due to ambiguity over the execution of the law permitting an investor to obtain a residency visa, issuance of title deed limited only to the developer, entailing a risk to the end user and uncertainty over long-term employment contracts for expatriates.”

Jain added: “Only a small percentage of expats who buy properties end up getting a residency visa. There are no defined criteria on eligibility, hence the ambiguity.” In the case of property deeds,  it is the developer who issues the document and not the government. Due to this, buyers have to ensure that the developer is a reputed one.

In case the project is delayed or left incomplete, the buyer would be in a soup, so real estate  analysts advise caution. Of course, if it was the government that issued the deed, it would be like money in the bank. For example, a government-issued bond would be seen as more solid than one issued by a private player. Moreover, seeing it is private property being sold and purchased, the government has no role in the transaction itself.

Westbay Lagoon - Freehold area for buying apartments in Qatar
Westbay Lagoon – Freehold area

Locations available to expats

Qatar has allowed non-Qataris to buy real estate and residential property in 18 areas — Msheireb, Fariq Abdul Aziz, Doha Al Jadeed, Old Al Ghanim, Al Rufaa/Al Hitmi, Salata, Bin Mahmoud, Rawdat Al Khail, Mansoura/Bin Dirham, Najma, Umm Ghuwailina, Al Khulaifat, Al Sadd, New Mirqab/Al Nasser, areas around Doha International airport, Al Dafna/ Onaiza/Al Qasser and Lusail where they are available for leasehold purchase.

The Pearl, West Bay Lagoon and Al Khor Resort Project are available for freehold purchase. “Going rates in the Pearl development vary between QR 12,000 to QR 15,000 per sq. metre, between QR 5,500 to QR 6,500 per sq. metre in Najma and Mansoura and between QR 7,500 to QR 8,500 per sq. metre in Al Sadd.

Leasehold purchase

In a leasehold purchase, it is mandatory the original sponsor agrees to transfer sponsorship to his property. This means once the property is transferred, it acts as a sponsor, a guarantee, in a manner of speaking.  Should a buyer come from overseas to buy a property, he or she should have a Qatari visa before purchasing the property.

The buyer will be purchasing leasehold from the property owner on a 99-year renewable basis and those leasing the property can use it for commercial purposes, as a residence, transfer the lease and even sublet or rent. The land or residency unit will act as sponsor (who issues exit permits in this case?).

Asteco Qatar managing director Jed Wolfe said: “Sale prices depend on a number of factors which include location, layout and size, décor, fixtures and finishes and amenities both at the property and in the surrounding vicinity.”

Freehold purchase

Under freehold ownership, the buyer has title to the land as well as the structure. This pretty much makes the buyer the outright owner unlike in the case of leasehold, where the property is `owned’ for 99 years. Wolfe said: “In the past 12 months we have witnessed marginal but steady growth in residential freehold sale prices and this trend looks set to continue. Q2, 2013 saw the largest number of freehold residential sales for the past three years on a quarterly comparison basis.”

Good investment?

Wolfe said: “There are many reasons why investing in Qatar is a good investment, not least the fact it is tax-free and offers expats residency visas and freehold properties.  The freehold zones are ‘lifestyle’ locations offering a shift away from more traditional styles of urban living in Qatar, providing more integrated urban and social community living. These projects are ‘destinations’ and compete with any luxury projects around the world.” However, residency permits are not guaranteed with all purchases, which can make property purchase a slightly risky proposition.

Najma - Leasehold area, property Qatar
Najma – Leasehold area
Photo by: Bosco Menezes

End use or speculation?

So, why would expats choose to invest in Qatar real estate? Wolfe said this was a combination of end use on the part of buyer and speculation on the part of others. He stated: “It is a combination of both.

Long-term residents see the opportunity cost of buying rather than renting and using housing allowances to offset mortgage payments.  Other expatriates see Qatar as a safe haven and a growth market to invest their cash.  This is particularly prevalent with expatriates from the wider region and Arab Spring countries.”

Jain said: “According to local real estate market players, speculation in the Qatari market is scarce. The limited numbers of expatriates that decide to buy properties are mostly end users.”

According to Wolfe: “There are three key considerations when comparing Qatar to Dubai; the 2030 development ‘Vision’ which includes significant infrastructure development much of which is now underway; the hosting of the FIFA World Cup in 2022; and supply of freehold zones.

There is limited supply of freehold zones (currently two) in Qatar when compared to Dubai and there is only one other zone planned in the medium term. When you analyse factors that drive growth and therefore return on investment, Qatar has an extremely compelling outlook.”

Tedious procedures

As an expat, buying property in Qatar is not a matter of plunking down cash and walking away with the deed from the developer. There are procedures to be followed. The developer of a particular property can advise initially whether it is legal for foreigners to purchase a unit, but this should also be verified with Doha Municipality or the Ministry of Justice’s real estate registration department, or a reputable estate agent.

Interestingly, fewer than 100 non-Qataris were reported to have completed purchases by early 2011 and only 10 of those had obtained the associated property-owner’s residence permit, according to expatriate website qatar.angloinfo.com.

Mansoura - Leasehold area, apartments for sale in Qatar
Mansoura – Leasehold area
Photo by: Bosco Menezes

Residence permits

Non-Qatari home purchasers are entitled to apply for a homeowner’s residence permit, which is valid for five years, According to  Hukoomi, the Qatar government portal, non-Qataris who invest in selected real estate  projects in Qatar, are eligible to live in the country without sponsorship.

Applicants must obtain property ownership documents, certificate of good behavior and an authenticated medical checkup in order to qualify for what is called a real estate visa. The property developer or real estate agent should be able to guide the prospective buyer in this regard.

The matter of visas has always been a nebulous area, not just in Qatar but the rest of the GCC. In this instance, the government website gives no inkling as to what happens if the visa application is rejected. In fact, there is also no mention of grounds for rejection or even salary requirements, if applicable. It could well be that the purchaser of a property in Qatar is left high and dry. Unless proper clarifications are made and even the fine print explained, it is hard to see buyers lapping up property in Qatar.

Once it is confirmed that property is in a permitted area and registration carried out, the new owner must head to the office for registration of real estate for non-Qatar nationals which is in the Doha Municipality office in Al Sadd. The visa can then be processed by the Ministry of Interior. The Ministry of Justice’s real estate registration department completes the formalities. Fees, too, are involved and the buyer needs to pay 0.25 percent of the property’s value before the contract involving the purchase of the property can be signed, sealed and delivered.

New Mirqab/Al Nasser - Leasehold area
New Mirqab/Al Nasser – Leasehold area
Photo by: Bosco Menezes

Housing loans

Of course, not everyone has funds in hand for outright purchase of property, The best option then is to visit a bank. For example, IBQ is one of the few banks in Qatar which provides housing loans for expats.

Documents required are ID, passport, six months’ salary statements and a security cheque, which depends on the loan amount sought. The salary statements have to show that the buyer’s pay is deposited with IBQ. The minimum salary required to be considered for a loan is QR 5,000. Loan periods can vary from five t0 20 years and interest rates start at 3.99 percent depending on the value and tenure of the loan.

Business owners

Those who own a business and are seeking a loan have to really go through the grind. He or she has to submit documents like the company registration, company profile, bank statements for two years and balance sheets.

Then, the company has to be registered with the bank and be on a list of the bank’s approved companies. There is also a bizarre clause related to employees of the company. If 10 of the employees are making salaries of QR 5,000 to QR 10,000 per month, the business owner may as well kiss the chances of getting a loan goodbye.

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