Qatar’s Residential Property Market Analysis 2024

Qatar´s residential property prices are falling again, amidst weak demand coupled with an oversupply of available properties.

In April 2024, the real estate price index fell by 6.73% as compared to the same period last year, following annual growth of 0.87% in 2023, 5.09% in 2022, and 2.15% in 2021, according to figures from the Qatar Central Bank (QCB). When adjusted for inflation, the price decline is more severe, at 8.06%.

Qatar´s house price annual change

The average price of apartments was QAR10,320 (US$2,831) per square meter (sq. m) in Q1 2024, according to ValuStrat. On the other hand, villa prices averaged QAR 5,544 (US$1,521) per sq. m. over the same period.

During 2023, the total number of residential sales transactions fell by 16.2% from a year earlier, following a huge 25.5% decline in 2022, based on reports released by Cushman & Wakefield. These were in sharp contrast to the strong growth recorded in 2020 and 2021. In early 2024, there are some signs of improvement, with residential sales rising by 30% y-o-y in the first two months of 2024.

However, the oversupply of residential properties in Qatar continues to pull down prices. The availability of properties in the market increased significantly in the past two years as major new residential projects were completed ahead of the 2022 FIBA World Cup held in November 2022. The total number of apartments in Qatar reached 246,000 units in Q1 2024, while the stock of villas increased to 148,000 units. For the whole year of 2024, an additional 9,200 residential units are expected to enter the market.

After experiencing a cumulative house price fall of nearly 26% (-16.4% inflation-adjusted) from 2016 to 2020, the housing market improved dramatically in the past two years, buoyed by the introduction of more liberal foreign property ownership rules and after the Saudis agreed to end their sweeping economic and political blockade against Qatar in January 2021, restoring the air, land, and sea links to the emirate that were severed in June 2017. From 2021 to 2023, house prices increased by 8.3%, but still declined by 5.5% in real terms because of exceptionally high inflation in recent years.

Qatar´s housing market is projected to remain weak in the medium term, amidst moderating economic growth. During 2023, Qatar experienced an economic slowdown, registering a real GDP growth rate of just 1.6%, according to the International Monetary Fund (IMF). Prior to that, the economy grew by a robust 4.2% during 2022, a sharp improvement from annual growth of just 1.6% in 2021 and a contraction of 3.6% in 2020, propped up by strong services sector amidst the FIFA World Cup hosting in November to December of last year. The Qatari economy is expected to expand by a modest 2% annually this year and in 2025.

Housing boom and bust

In preparation for the 2022 FIFA World Cup, Qatari real estate boomed for three glorious years 2012-15, fuelled by rapid population growth and a construction boom:

  • In 2013, the real estate price index surged 20.74% (16.45% inflation-adjusted).
  • In 2014, the real estate price index soared by 34.67% (31.81% inflation-adjusted).
  • In 2015, real estate prices rose by 14.39% (10.75% inflation-adjusted).

However in 2016, the value of real estate transactions plunged by about 50%, and prices fell by 4% (-5.15% inflation-adjusted). Real estate prices fell a further 9.9% (-10.4% inflation-adjusted) in 2017, by 2.6% (-2.4% inflation-adjusted) in 2018, and by another 8.1% (0.6% inflation-adjusted) in 2019, as Saudi Arabia´s hostility adversely affected Qatar´s economy. In 2020, the housing market continued to struggle, with prices falling further by 8.1% (-4.9% inflation-adjusted), amidst the Covid-19 pandemic.

In October 2020, the Qatari government responded by loosening its foreign property ownership rules, in an effort to attract more expatriates, foreign buyers, as well as real estate funds.

Then in January 2021, the Saudis agreed to end their sweeping economic and political blockade against Qatar, which began four years ago. Qatar´s politics are more liberal, which irritates the Saudis. In addition Qatar, like Turkey, maintains support for the pan-Islamist Muslim Brotherhood, abhorred by the UAE and the Saudis, and maintains links to Iran, with which it shares a major oil field. The new deal restores the air, land, and sea links to the emirate that were severed in June 2017.

These factors have resulted in improved economic, as well as housing market conditions. House prices rose by 7.4% (-4.8% inflation-adjusted) from 2021 to 2022, in sharp contrast to the cumulative decline of 25.9% (-16.4% inflation-adjusted) in 2016-20, thanks to increased property demand. However recently, the Qatari housing market seems to be weakening again.

During 2023, house prices were more or less steady, with the real estate price index increasing by a meager 0.87% from a year earlier but falling slightly by 0.76% when adjusted for inflation.

Qatar Real Estate Price Index graph

Residential demand showing signs of improvement

During 2023, the total number of residential sales transactions fell by 16.2% from a year earlier, following a huge 25.5% decline in 2022, based on reports released by Cushman & Wakefield. These were in sharp contrast to the strong growth recorded in 2020 and 2021.

However, there are some signs of improvement. In the first two months of 2024, residential sales were up by 30% as compared to the same period last year, indicating an increase in transaction value of 46%.

"The sales market has been dominated by owner-occupiers rather than investors in recent months. Typically, apartment sales are being driven by residents looking to secure residential permits and avoid paying rent. Purchasers are being encouraged by the increasing flexibility of structured payment plans for new off-plan sales being offered by many developers in Lusail´s various residential districts," said Cushman & Wakefield.

Doha and Al Rayyan had the highest volume of transactions for residential houses in Q1 2024, according to ValuStrat.

Supply continues to increase

In recent years, Qatar has been grappling with excess supply following the construction boom tied to the 2022 soccer World Cup. The country has currently an estimated excess supply of more than 80,000 units.

In Q1 2024, the total residential stock reached around 394,000 units, with about 148,000 villas and 246,000 apartments, according to ValuStrat. This was up by 2.6% from the previous year.

Notable projects handed over in Q1 2024 included Murano Tower and Tower 33, both in Lusail Marina with a total of 365 apartments. There were also 50 villas completed during the quarter.

For the whole year of 2024, there are 9,200 units of expected additional supply - 40% of which will be located in Lusail. The biggest project to be completed this year is the Janoub Garden Residence, covering at least 2,400 apartments, according to ValuStrat.

Qatar Residential Supply graph

Falling rents; moderately good rental yields for apartments

In Q1 2024, the median asking rent for a residential unit in Qatar fell by 3.6% as compared to the previous quarter and by 6% from the same period last year, according to ValuStrat. This is in contrast to the modest 3% increase seen in Q1 2023.

Location One-bedroom Two-bedroom Three-bedroom
Al Mansoura 3,500 5,000 7,000
Lusail 6,000 7,000 9,500
Al Sadd 5,500 6,500 8,250
Fereej Bin Mahmoud 5,000 6,000 7,000
The Pearl 8,000 11,000 13,250
Source: ValuStrat

Over the same period:

  • For apartments, the median asking rent stood at QAR 6,000 (US$1,649) per month, down by 4% q-o-q and by 6.3% y-o-y. Accordingly, the median monthly rental rate for a one-bedroom apartment was QAR 5,500 (US$1,512); a two-bedroom apartment was QAR 6,500 (US$1,787); and a three-bedroom apartment was QAR 8,250 (US$2,268).
  • For villas, the median asking rent dropped by 4% y-o-y and fell by 1% q-o-q. The median quoted rent for a three-bedroom villa was QAR 11,750 (US$3,230) per month; a four-bedroom was QAR 12,500 (US$3,436); and a five-bedroom was QAR 14,000 (US$3,848).
Location Three-bedroom Four-bedroom Five-bedroom
Al Wakrah 8,000 8,500 10,500
Al Muraikh 11,750 12,500 14,250
Abu Hamour 10,250 12,500 13,000
Al Waab 12,750 13,000 14,000
West Bay Lagoon 19,500 21,000 25,750
Source: ValuStrat

For apartments, "approximately 15,000 lease contracts were signed during the quarter with Al Wukair, Al Mashaf, and Al Thumama being the top residential areas with an estimated 5,000 agreements," said ValuStrat. On the other hand, for villas, "approximately 5,000 lease agreements were signed during the quarter with Freej Al Soudan, Al Aziziya, Ghanim, and Murrah being the top residential areas, accounting for an estimated 600 contracts (Ministry of Municipality and Environment)."

About 59% of all occupied housing units in Qatar are rented, according to QSA. The average expat household in Qatar spends more than a third of its annual income on rent, according to Colliers International.

Gross rental yields for residential properties are moderately good in Qatar, which averaged 5.61% in Q2 2024, slightly up from 5.5% in Q3 2023, based on a research conducted by the Global Property Guide in April 2024.

This is in line with ValuStrat´s figures, which showed that residential gross yields in Qatar stood at 5.9% in Q1 2024.

By major area:

  • In Doha, particularly at The Pearl, rental yields for apartments currently range from 3.21% to 6.58%, with a city average of 5.71%, according to the Global Property Guide.
  • At the Lusail, apartments offer gross rental yields ranging from 4.27% to 6.92%, with a city average of 5.52%.

Qatar Prime Apartment Rents per month graph

Size of the mortgage market shrinking, amidst high interest rates

In April 2024, Qatar Central Bank held its overnight lending rate unchanged at 6.25%, after raising it by nine consecutive times resulting to a cumulative 375 basis points rate hike from May 2022 to July 2023. The central bank kept the key interest rate unchanged since. Likewise, the deposit rate and repo rate were also held constant, to 5.75% and 6.00%, respectively.

The central bank´s recent move was in an effort to rein in inflationary pressures and in line with the US Federal Reserve´s monetary policy given the long-standing currency peg to the US dollar.

As a result, the size of Qatar´s mortgage market contracted to about 20.2% of GDP in 2023, down from 21.6% in 2022, 24.6% in 2021 and 29% in 2020, based on Global Property Guide´s estimates. Though, it was still far higher than the 7.2% of GDP sixteen years ago.

Qatar Real Estate Loans to Private Sector graph

Likewise in terms of value, real estate loans are now falling. In Q1 2024, the total amount of real estate loans outstanding, which include land purchases, property developments, and residential and commercial buildings, fell by 7.2% to about QAR 171.8 billion (US$47.2 billion) from a year earlier, according to figures from the QCB.

Expats can borrow up to QAR3 million (US$825,000) with a maximum tenure of 15 years. The loan-to-value (LTV) ratio is typically 70%.

Foreign property ownership eased

The new law introduced in October 2020 includes two important changes:

  • It increases the number of locations where non-Qataris can purchase real estate outright
  • It introduces a two-tiered residency program that rewards large investors with government-provided services

Earlier, the Qatari government approved Law No. 16 of 2018, which increased the number of freehold zones in Qatar from 3 to 10 effective last March 2019. Aside from The Pearl, West Bay Lagoon, and Al Khor, foreigners are now allowed to obtain freehold ownership in Rawdat Al Jahaniyah, Al Qassar (Area #60), Al Dafna (Area #61), Onaiza (Area #63), Al Wasail (Area #69), Al Khraij (Area #69), and Jabal Theyleeb (Area #69).

Foreigners who buy in designated freehold zones are automatically granted permanent residency, which extends to the owner´s family, for the whole duration of the ownership. Those qualified include:

  • children of Qatari mothers who are married to foreigners;
  • people with special talents "needed by the state";

And other individuals who extended notable services to the country.

Foreign investors who buy a property valued above US$ 1 million will be eligible for permanent residency, which comes with government benefits such as education and health care (previously limited to Qatari citizens and long-time permanent residents). With the new law, semi-permanent residency status is now open to buyers of property worth US$200,000, who can obtain renewable residency permits for themselves and their families without the need to be sponsored by an employer.

Permanent residents of Qatar will be treated like Qatari nationals and enjoy benefits such as access to healthcare and education systems, priority (after locals) for military and civilian public jobs, and will have permission to operate commercial activities without a local partner, and permission to own a property.

Three-fourths of Qatar´s total population of 3 million are foreigners, according to the Qatar Statistics Authority (QSA). About 82% of the population lives in Doha and Al Rayyan. In addition, the Ministry of Justice has recently launched a special section on its website for non-Qatari real estate ownership. The page lists the areas in which non-Qataris may own and benefit from real estate and the procedures, terms, and conditions for real estate ownership and use. The page also answers the most common questions about real estate ownership in the country.

Qatar Population in millions graph

Qatar´s Ministry of Justice has also established an Office for Non-Qatari Real Estate Ownership, according to Cabinet Resolution No. 28 of 2020, which is mandated to provide foreign nationals who want to reside or invest in Qatar with all the necessary requirements for the purchase and sale of real estate, including residential units and office.

However, citizenship will still be off-limits to foreigners.

Qatar National Bank (QNB), the country´s leading financial institution, offers home and land financing at rates as low as 3.5%. The maximum loan offered to expatriates is QAR3 million (US$825,000) with a term of not more than 15 years. One can borrow up to 70% of the value of the property.

Freehold areas for foreigners

Foreigners can buy in massive freehold areas:

The Pearl-Qatar

The Pearl is a QAR36.4 billion (US$10 billion) Riviera-style development, on a vast man-made island off the coast of Doha, the capital city. It provides over 40 kilometers of new coastline, linked to the mainland by a 4-lane, palm-tree-lined highway. Doha´s international airport is only 20 km away. It was here that Qatar offered its first freehold properties.

Developed by the United Development Company, The Pearl-Qatar has 16,000 villas and 25,000 apartments.

West Bay Lagoon

West Bay Lagoon is a 2 million sq. m. private beachfront compound, centered on the Zigzag Towers. At the northern tip of Doha´s West Bay district, it is surrounded by artificial lagoons. The district is known for its luxurious waterfront villas, which are some of the most expensive in the country.

The villas cost about QAR 7,321 (US$2,012) per square meter (sqm) to purchase. On the other hand, villas can be rented for an average of QAR 11,083 (US$3,046) per month, according to The Pearl Gates.

Barwa - Al Khor City

The Barwa - Al Khor project is a complete city, including seafront chalets, villas, and elite apartments, covering 5.5 million sq. m. in Al Khor, 57 km north of Doha. The QAR30 billion (US$8.25 billion) Barwa Real Estate development will house 63,000 residents in 24,114 elite residential units. It also has hotels and sports facilities.

In March 2019, Law No. 16 of 2018 was passed, which effectively increased the number of freehold residential zones from 3 to 10.

The additional freehold areas include:

  • Rawdat Al Jahaniyah
  • Al Qassar (Area #60)
  • Al Dafna (Area #61)
  • Onaiza (Area #63)
  • Al Wasail (Area #69)
  • Al Khraij (Area #69)
  • Jabal Theyleeb (Area #69)

"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," said Pawel Banach of ValuStrat.

There are also 16 leasehold areas for foreigners

Foreigners can alternatively buy leasehold property for 99 years, renewable, in 16 designated areas, including the multi-billion dollar Lusail project, under Cabinet Decision No. 6 of February 2006. Foreigners can use the properties commercially or residentially, transfer the lease to another party, and sublet or rent.

Lusail City is a QAR164 billion (US$45.1 billion) waterfront community on the northern coast of Umm Salal, 15 km north of Doha. It is expected to house over 200,000 residents in 10 hotels, 3,000 villas, 12,000 apartments, and retail areas.

Developed by Qatari Diar, Lusail covers an area of around 21 million sq. m. This mega project, in 16 zones, will contain an Energy City costing QAR9.5 billion (US$2.6 billion), and an Entertainment City, costing QAR5.5 billion (US$1.5 billion). The Lusail Iconic Stadium is also expected to be built in the city. Construction for this massive development started in 2006 and is expected to be completed by 2025.

Another mixed-use development project is Al Waab City, owned by Nasser Bin Khaled Group, which covers about 1.2 million sq. m. Incorporating "green strategies" and sustainable design principles, it is estimated to cost QAR13 billion (US$3.6 billion). The development includes 2,411 residential units, 232,715 sq. m. of commercial space, and a 425-room hotel complex. Phase 2 is due to be fully completed by 2025.

Other leasehold property developments in Qatar:

  • Musheireb (Area #13)
  • Frij Abdul Aziz (Area #14)
  • Doha Al Jadeed (Area #15)
  • Ghanem Al Qadeem (Area #16)
  • Al Rifa Al Hitmi (Area #17)
  • Al Salata (Area #18)
  • Fereej Bin Mahmoud (Area #22)
  • Fereej Bin Mahmoud (Area #23)
  • Rawdat Al Khail (Area #24)
  • Al Mansoura & Fereej Bin Dirham (Area #25)
  • Najma (Area #26)
  • Umm Ghuwailina (Area #27)
  • Al Khulaifat (Area #28)
  • Al Sadd (Area #38)
  • New Mirqab Al Jadeed & Fereej Al Nasr (Area #39)
  • Doha International Airport (Area #48)

Qatari economic growth moderating, and government finances remain strong

Qatar experienced an economic slowdown last year, registering a real GDP growth rate of just 1.6%, according to the International Monetary Fund (IMF). Prior to that, the economy grew by a robust 4.2% during 2022, a sharp improvement from annual growth of just 1.6% in 2021 and a contraction of 3.6% in 2020, propped up by strong services sector amidst the FIFA World Cup hosting in November to December of last year.

"Qatar´s decade-long efforts to diversify the economy culminated into the successful hosting of the 2022 FIFA World Cup. After a very strong performance in 2022 on the back of World Cup-induced buoyancy and high hydrocarbon prices, growth has been normalizing, with real GDP growth in 2023 at 1.6 percent," said the IMF.

The country´s economy had already been struggling even before the Covid-19 pandemic due to Saudi´s economic blockade that lasted for about four years. The participating Gulf-based Arab nations cited Qatar´s support for Islamist groups, violating a 2014 agreement with the members of the Gulf Cooperation Council (GCC), as one of the main reasons for the blockade. Qatar was also criticized by its neighbors for its amicable relations with Iran.

The four Arab nations issued a list of 13 demands on June 22, 2017, which included curbing diplomatic ties with Iran and shutting down Al-Jazeera. Qatar refused to comply, stating that it would not agree to measures that threaten its sovereignty. In a surprise move in December 2018, Qatar ended its nearly 60-year membership of the Organisation of the Petroleum Exporting Countries (OPEC) - the oil cartel dominated by Saudi Arabia.

As a result, the Qatari economy contracted by 1.5% in 2017 and posted meager growth of 1.2% in 2018 and 0.7% in 2019. Then the pandemic aggravated the country´s already ailing condition, causing the economy to shrink by 3.6% in 2020.

In January 2021, the Saudis agreed to end their economic and political blockade against Qatar.

Before the pandemic and the economic blockade, Qatar´s economy had been growing strongly by an annual average of 16.5% in 2004-11 and by 3.8% in 2012-16.

Economic growth is projected at a modest 2% both this year and in 2025, based on IMF estimates.

"Qatar continues to demonstrate significant resilience against global uncertainty and geopolitical tensions. The Israel-Gaza conflict has had no visible impact on Qatar, and the tension in the Red Sea had delayed Qatar´s LNG export only temporarily due to re-routing," said the IMF.

The country´s finances remain strong. Qatar registered a current account surplus of nearly 21% of GDP in 2023, following surpluses of 26.7% in 2022 and 14.6% in 2021, and a shortfall of 2.1% in 2020. Qatar also recorded a budget surplus equivalent to 9.3% of GDP in 2023, from a balanced budget in 2022, a small surplus of 0.2% of GDP in 2021, and a deficit of 2% of GDP in 2020, according to the Ministry of Finance.

As a percent of GDP, Qatar´s government gross debt narrowed to 46.7% in 2023, from 46.9% in 2022, 58.4% in 2021, 72.6% in 2020, and 62.3% in 2019. Debt is expected to remain around 47% of GDP this year, before falling to about 45% in 2025, according to Fitch Ratings.

In March 2024, Fitch Ratings upgraded Qatar´s long-term foreign-currency issuer default rating (IDR) to ´AA´ from ´AA-´ with a stable outlook. Prior to this, Moody´s also revised up in January 2024 the country´s credit rating from Aa3 to Aa2, with a stable outlook.

"The upgrade reflects Fitch´s greater confidence that debt to GDP will remain in line with or below the ´AA´ peer median after falling sharply in recent years, while Qatar´s external balance sheet will strengthen from an already strong level. Qatar is likely to retain budget surpluses until the 2030s as a result of the North Field expansion," said Fitch Ratings.

In April 2024, the overall inflation rate eased to 0.71%, marking its lowest reading since March 2021, thanks to the central bank´s successive interest rate hikes in the previous months. Inflation surged to 5% during 2022, sharply up from an annual average of just less than 0.5% in 2015-21. It then moderated to an average of 3.1% in 2023.

Qatar GDP Growth and Inflation graph