In 2004, when Qatar enacted a law (Number 17 of that year) allowing foreigners to buy properties in some designated areas, the country’s population was 750,000 and house rents averaged less than QR1,500 a month. Today, the population has literally exploded, having surged more than three times to 2.33 million, and rent prices have quadrupled.

Qatar’s property and rental markets did very well until 2008 but prompted by the world financial crisis that raised its head that year, house prices fell by about 40 percent the following year. They dipped again, albeit marginally (by about four percent), in 2010. Qatar’s victory in the coveted bid to host the 2022 World Cup late in 2010 changed the equation entirely. House prices and the rental market began stabilising the following year, and the boom that began then, continues.

Local newspapers are always full of reports of how property owners have been increasing rents and how the hapless tenant is being made to suffer. But ironical as it may seem, the most expensive rental properties in Qatar are in an area where a vast majority of owners are foreigners – The Pearl-Qatar.

“Prices have continued to rise in The Pearl-Qatar, especially for most studio, one and two-bedroom units,” says Dan Strutt, sales and leasing manager of real estate agency, LS, that focuses on The Pearl-Qatar and West Bay residential accommodation, in comments published by a local newspaper late January.

Property rates in these locations are much above QR10,000 per square metre and continue to rise. “It is a city in itself and being a freehold zone, it is a lifestyle location,” is how a real estate agency official described The Pearl-Qatar in comments to bq. “The rental market for The Pearl-Qatar is doing very well,” confirms Al Asmakh Real Estate Development Company to bq.

pearl houses

Freehold and leasehold zones

As opposed to this elite destination for expatriate living, the cheapest rental accommodation is available also in expatriate-dominated but working class localities – those of Al Muntazah and Al Mansoura. Interestingly, what makes this massive man-made island, The Pearl-Qatar, a desirable location for elite living is its status as a freehold zone – an area where foreigners can buy and own property for ever.

Al Mansoura and Al Muntazah, along with the adjoining Najma and Umm Ghuwailina, which are not far away from these localities, are among the 18 designated areas in Qatar where non-Qataris are allowed to buy leasehold properties – properties that can be leased by them for 99 years. Upon expiration, the lease can be renewed or the land and structure go back to the original owner.

There are three freehold zones in Qatar, and aside from The Pearl-Qatar, the other two are the West Bay Lagoon and Al Khor Beach development project, popularly known as Al Khor resort.

According to real estate agents active in these and other areas, properties in the freehold zones are in hot demand since the buyer is the owner forever and is automatically entitled to a permanent residency permit (RP) that can be acquired subject to certain conditions such as a crime-free record and no contagious disease.

“The residence permit is valid for as long as one owns the property; the spouse gets an RP too, however children get RPs only if they are below 18, and then the usual immigration laws of Qatar apply if the wish to visit or work here,” says Al Asmakh. It needs to be clarified, this kind of residency permit is for residency only, and if the owners of freehold properties wish to work in Qatar, they need to have valid work visas.

“Doha needs more properties to offer on freehold as well as leasehold ownership to people,” says Al Asmakh, hinting that supplies are less than demand. According to unofficial statistics, which could not be confirmed,

The Pearl-Qatar alone offers some 16,000 villas and 25,000 apartments, and when the Barwa-Al Khor City (Resort) project is ready, another 25,000 elite residential units will be added to the freehold zones.

In West Bay Lagoon area, close to the Ritz-Carlton, developments are taking place and the prices of land here, which were merely QR 275 per square foot in 2006, are ruling at all-time highs. “One can buy independent plots here to build personalised villas and that’s the beauty,” says a real estate agent.

In freehold properties the buyer gets the title for both, land and the structure. These properties are in short supply and that, according to some real estate agents, makes them ideal for investment.

The yield on investment in these properties through rental income is between six and seven percent, says Al Asmakh. Nevertheless, if market operators are to be believed, many investors in The Pearl-Qatar are end-users and so little speculation in property transactions are in witness here.

It is interesting to note that the interest of foreigners in properties in Qatar has been triggered after The Pearl-Qatar development, as according to market sources there were fewer than a 100 non-Qatari buyers by 2011. Exact figures of how many foreigners have so far invested in properties in Qatar are not known, but there is a separate office for the registration of their deals in Doha Municipality and the Land Registry at the Ministry of Justice, loosely known as the Real Estate Registration Department, which maintain updated records of non-Qatari property buyers.

Investing in leasehold properties

Unlike freehold properties that are for residential purposes only but can be rented or even sublet for income, leasehold properties available to non-Qataris in the 18 designated areas can be used for both, residential and commercial purposes. The Ministry of Municipality & Urban Planning’s Client’s Guide (Real Estate & Residential Units) states: “The beneficiary can renew the contract for a similar duration with the consent of the owner.

Another merit granted by the Act (No 17 of 2004) is the beneficiary may further bequeath the right to utilise, vend, alienate the ownership of the real estate or mortgage it which strengthens the trust of the beneficiary arising from the merits granted by the law.” Qatar’s visa and RP rules apply to leasehold property buyers.

For residential leasehold properties however, the maximum period of utilisation is 99 years (as specified by Act No. 17). The guide states: “In case the utilisation period is successive between multiple individuals, the respective person owning the right to utilise the residential unit shall only enjoy the balance of the (99) years remaining unless the right has been suspended for whatever reason.”

Old Ghanem in downtown Doha which includes the hotels area and faces the picturesque seafront along the Corniche and the Museum of Islamic Art, has been declared a mixed-use locality, and for this reason property rates here have been hitting through the roof. The area is part of the 18 designated localities where foreigners are permitted to buy properties on long lease. The other leasehold areas include Msheireb, New Doha known as Doha Jadeed, Al Dafna (the towers area in the West Bay), Fereej Abdul Aziz (near Jaidah Flyover), Al Sadd and Bin Mahmoud.

Lusail and Al Waab are also included among the leasehold areas, but for Lusail, according to Al Asmakh, the rules are a bit different. Lusail City is where a massive flagship stadium is being built, which will host the opening and closing ceremonies of the 2022 World Cup, and needless to say, the finals of the tournament.

The upcoming Lusail City will house more than 200,000 people in 3,000 villas, 12,000 apartments and 10 hotels. In this USD 5 billion waterfront community Qataris will be allowed to buy properties on freehold basis but when they sell the same property to a foreigner it would be on leasehold basis and vice versa.

Talking about Qatar as a whole, which is making hectic preparations to hold the FIFA 2022 World Cup, some 74,000 residential units are expected to be completed by 2020, out of which 66,000 will be apartments and 8,000 will be villas and townhouses, according to Asteco.

Official figures suggest that by 2010, there were 259,000 housing units in Qatar, of which 196,000 were apartments and the remaining 62,000, villas. Of the total, only 81.4 percent were occupied.

In the five years since then, Qatar’s population has surged over 30 percent, so it is expected that the residential units may also have multiplied at the same ratio, if not more.



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