From a market with limited housing and office supply and high prices, Doha now offers a range of high-quality accommodation and offices catering to all tastes and at affordable rates.

A construction boom in 2006-08 brought a flood of new residential and commercial properties into the market just as demand collapsed in the wake of the global economic crisis. This caused prices in some areas and developments to halve. Most of the new supply is concentrated on the luxury end of the market, which has pushed down prices in older developments in particular.

Residential

Since 2004, foreigners have been allowed to purchase freehold and leasehold property in designated areas. Freehold properties may be acquired in the West Bay area and on the Pearl-Qatar and Barwa developments. There are 18 areas where foreigners can own leasehold property for up to 99 years.

Property in the Diplomatic Quarter and the West Bay area is highly sought after

Getting a mortgage in Qatar is relatively simple, although banks’ scrutiny of potential buyers has increased since the credit crunch. Most major international banks have offices in Doha and will offer mortgages with a minimum 25 per cent down payment. The terms of most mortgages offered in the country tend to be quite short, lasting about 20-25 years. Qatar offers residence permits to expatriates who buy property in the country.

However, most expatriates prefer to rent an apartment or villa – official statistics say 60 per cent of accommodation in the country is rented. This is usually done through a letting agent. Qatar’s property rental market has improved a lot in recent years. Previously, the quality of housing available was poor and a lack of supply inflated prices. The completion of the first phases of the Pearl-Qatar development, (a luxury residential complex on a man-made island off the coast of Doha) and residential buildings including the 34-storey Zig Zag towers released plenty of high-quality stock into the market. A popular way to find property is through the website qatar.dubizzle.com.

Property in the Diplomatic Quarter and the West Bay area – Doha’s new business district – is highly sought after. Doha is undergoing major development and the next decade will change the face of the city. The plans include the construction of a metro and light railways. These will help to link together the various real estate schemes and address a key complaint among residents: that developments such as the Pearl-Qatar feel cut off from the rest of the city.

Sales and rental prices have been climbing over the past few years and are likely to continue rising as the government accelerates its infrastructure construction programme. It will require thousands of expatriate workers to execute the ambitious plans and this will push up demand for property, and with it prices. The continued addition of new supply should help prevent prices spiralling out of control, however. About 66,000 new residential units are expected to be completed in Qatar before 2020, about a third of existing supply.

During the third quarter of 2013, rental prices for one-bedroom apartments ranged from QR3,500-12,500 ($961-3,433) a month, while five-bedroom villas ranged from QR11,850-34,500. Utilities charges are generally included in the cost of rented accommodation.

Office space

Qatar’s commercial real estate sector has also benefited from a wave of new supply in the past few years. Previously, many firms were forced to operate out of villas as demand for commercial facilities outstripped supply; in 2008 occupancy in Doha’s office sector was 95 per cent. Now, those firms have been forced out of villas into commercial space to prevent occupancy rates from tumbling below 80 per cent.

Qatar’s commercial real estate sector has benefited from a wave of new supply

Dozens of new office blocks have been completed in the past few years, most in the West Bay area. The towers have transformed the skyline of the capital, but have also created a major oversupply of commercial property in Qatar. The government is the largest leaser of office space, but Asteco predicts the sector will begin to rely much more on the private sector, as many government departments have already moved to offices in West Bay.

Office rental rates are highest along the West Bay and Corniche areas of Doha, where monthly rates are as high as QR180 a square metre. Prices are significantly lower in older parts of the city, with offices going for about QR108-113 a sq m around the A-Ring Road and Old City. Demand from the private sector is expected to increase in the coming years, but the market will continue to be oversupplied for the next few years at least.

Hotels

Qatar has a good supply of hotels, predominantly four- and five-star properties, and new stock is continually coming onto the market. Most of the major international brands are represented in Qatar, including the Sheraton, Movenpick and InterContinental. Unlike Dubai, not all hotels are licensed to sell alcohol.