Doha: The approval by Cabinet to a draft law on the regulation of non-Qatari ownership and use of real estate will boost Qatar’s growing real estate market. The move is expected to attract long-term capital in Qatar’s resilient real estate sector.
The Cabinet, last week, approved a draft resolution of the Council of Ministers determining the areas and places in which non-Qataris are allowed to own and use real estate.
“The recent reform to change freehold ownership law will contribute to a positive transformation of the real estate sector which will now embrace its cultural diversity through new initiatives designed to encourage investments and positively change business perspectives to ultimately result in overall economic growth,” Pawel Banach, General Manager of ValuStrat Qatar told The Peninsula.
Real estate market in Qatar has evolved over the years with initiatives taken by the government to improve transparency, ownership regulations and overall participation.
“Overall, transactional volumes will improve on the condition that the areas selected for freehold expansion are high in tenant demand, fully developed with functional infrastructure and affordable. It is preferable that freehold areas are created within existing residential zones rather than developing entirely new freehold communities,” said Pawel Banach.
The decision will also help non-Qatari to make informed decisions on real estate investments. “Allowing outright foreign ownership within existing residential locations will help non-Qataris to make more informed decisions of whether they desire to invest in property or purchase for own occupation. Current real estate market tracing a downward trajectory in foreign demand, could improve if the proposed new freehold locations carry high rent to sale ratio and average occupancy,” Banach added.
Despite the unjust siege imposed on Qatar by blockading countries, Qatar’s real estate sector has demonstrated its resilience. All the municipalities have witnessed mega deals in the last year.
According to the data of the Ministry of Development Planning and Statistics, Doha municipality witnessed real estate deals worth QR10.7bn last year, leaving other municipalities behind.
Al Rayyan came second in terms of value of deals while Al Daayen was on the third place. Al Wakrah, which has undergone remarkable infrastructure development in the past few years, was on the fourth place in terms of real estate deals.
The value of properties sold in Al Rayyan Municipality was QR6.37bn in 2018, while it was QR2.76bn in Al Daayen Municipality. Total value of real estate deals in Al Wakrah Municipality was QR1.84bn in 2018.
Besides improving transactional volume, the initiative will impact prices of current freehold and leasehold properties.
“If more affordable areas are made available for expatriates especially with the promise of long-term residency, prices in these locations will be subjected to correction due to increased demand/ competition. As a result, this might spur more innovative pre-development payment plans as well as new home ownership finance options,” he added.
