Deputy Group CEO
Ezdan Holding Group
Following the elapse of the first quarter; Qatar has seen an array of many positive indicators by which the rebound of the Qatari economy is highly reflected and the expectation of rosier results looms and a sanguine outlook as we are getting closer to the World Cup. By deep scrutiny in the budget, Qatar’s economy realized an actual surplus up to QAR 200mn in Q1- 2021, compared to a QR 400mn deficit a year earlier, driven by the surge in revenues from non-oil activities standing at 22.7 percent, or QR 1bn. The total spending on major projects during the first quarter of 2021 amounted to QR 15bn, or 20.8 percent of the total budget earmarked for 2021. It is highly projected that the economy will stave off the post-pandemic fallouts during the current year, provided that GDP at fixed prices will achieve a growth estimated at 2.2 percent in 2021, as this is shored up by the defensive steps for the national vaccination program and the rising demands for oil and its rocketing prices, according to the Ministry’s projections.
Based on the above positive indicators, which impelled the World Bank’s prospects in April 2021 about Qatari economy during the forthcoming period, the growth rate of the Qatari gross domestic economy is expected to post highs by 3 percent in 2021, superseding the expectations of Qatar’s Ministry of Finance, along with an estimated rise in the growth rate of the domestic economy in 2022 to reach 4.1 percent, driven by the first global sporting event after the COVID-19 pandemic.
Furthermore, there are forecasts that the majority of GCC economies will recover during the current year, with the Qatari economy expected to grow during the year 2021 by 2.4 percent, as noted by the International Monetary Fund (IMF)’s report-April 2021.
As for the real estate market in Qatar, it is a good chance to highlight that the real estate price index during the first quarter of 2021 achieved an increase in the value of transactions by 19 percent, totaling QR 7bn, reflected in 1,726 property sale deals, as compared to the same quarter of the previous year.
Undoubtedly, the COVID-19 pandemic has cast a shadow over Qatar and the world, and we see the impact of this clearly in the monthly statistical bulletin for April 2021 from the Planning and Statistics Authority. The total population in the State of Qatar declined by 5.6 percent in April 2021 compared to a year earlier, and perhaps the most affected in terms of gender are males compared to females, and the most affected in terms of age groups are 15-24 age groups, as indicated in the bulletin. Such a remarkable decline triggered a number of impacts on withholding the growth in the realty sector. However, this effect is about to dissolve following the progress in the vaccination plan implemented in the State of Qatar, which has attained the acme of completion. Such preemptive initiatives restored confident sentiments among investors and customers in the real estate market, in addition to the expectation that the population will return to the increase in the last quarter of 2021.
It is worth noting that the real estate sector has proven its strategic foothold and ability to ingest crises, as despite the challenges imposed by the Corona pandemic and the accompanying drop in global oil prices, the real estate sector in Qatar has been able to adapt to such mishaps, and perhaps the facilities and government’s efforts to beef up financial aids represented in packages of positive incentives have expanded the circle of non-Qatari ownership and usufruct over real estate, and the law has granted whoever owns a real estate unit with about USD 200.000 (equivalent to QAR 730,000 ) the right to reside with the family without an employer, and obtain a permanent residence in Qatar for those who invest one million dollars (QAR 3.65mn).This prompted the registration of more than two thousand freehold and usufruct deals during the last period, which reflected positively on the performance of the real estate market.
This sector would not have witnessed a remarkable recovery without the multifaceted subsidies from the sovereign authorities, as this sector benefited from the financial facilities offered by Qatari banks. In this regard, it is worthy to note that the total credit facilities provided by banks to the real estate sectors and contractors in the private sector amounted to approximately QAR 190.4bn (about USD 52bn) by the end of December 2020, signaling an increase of about QAR 5bn (about USD 1.4bn) in the real estate sector, and about QAR 3.6bn (about USD 1bn) in the contractors sector on an annual basis.
As a resident of the State of Qatar, and as well-informed with the economic movement in general and real estate in particular, I witness the distinctive infrastructure that the state provides and at highest levels of safety for individuals and families. I do encourage SMEs, entrepreneurs, and investors to invest strongly in the real estate sector, as this sector is expected to witness growth and improvement in the levels of value and return in the medium and long terms, benefiting from the persistent development of infrastructure and the organized international sports tournaments in addition to facilitating foreign ownership and their ability to do business.
This article was published as part of the sixth edition of Property Finder Qatar’s Trends Report