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Qatar’s mortgage market buoyed by law reforms

Qatar’s mortgage market has been given a lift by a package of regulatory reforms, industry experts told AGBI after transactions rose sharply despite high interest rates.

In the first quarter of 2024, the value of Qatari mortgage transactions was nearly 90 percent higher than in the previous three months, according to ValuStrat research. It was up almost 37 percent year on year.

A similar increase in Saudi Arabia was reported earlier this month.

There were 236 mortgage transactions for existing residential and commercial properties in Qatar in Q1, ValuStrat said. The total value stood at QAR16.8 billion ($14.6 billion).

The value has risen by 110 percent in two years, said Anum Hasan, ValuStrat’s manager for advisory and research for Saudi Arabia and Qatar, citing figures from the Ministry of Municipality and Environment.

About half of the transactions were for villas, she said.

Hasan also pointed out that the Q1 increases were unexpected given the high interest rates on loans. Qatar's federal funds rate was 0.3 percent in Q1 2022 but now stands at 5.3 percent.

“A major stimulus to the mortgage transactions in Qatar could be the changes in regulations which were introduced in the second quarter of 2023,” she said. 

“The loan-to-value ratios and tenure limits were made more favourable for Qataris and expatriates.”

Qatar has also raised confidence by tightening the enforcement of escrow account standards, according to Arsalan Shaikh, a senior consultant at law firm Al Tamimi.

Escrow is a legal concept in which a third party holds an asset or funds before they are transferred.

“The establishment of a real estate regulator, which will be issuing much needed new laws and regulations, will also enhance investor confidence,” he said. 

“Additionally a new property registration law has just been issued in the Gazette. This will also create more confidence in the market.”

For a detailed perspective on the property market, visit: Qatar - Real Estate Review Q1 2024