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Qatar’s real-estate buyers wait on lower interest rates

By Valentina Pasquali
The still-developing Lusail district in Doha. Real-estate sales in Qatar fell 15% between June and September year on year Alamy/Frank Nowikowski via Reuters
The still-developing Lusail district in Doha. Real-estate sales in Qatar fell 15% between June and September year on year
  • Sector shows Q3 declines
  • Mortgage deals down 10%
  • Sharp increase in tourism

Consumer expectations that interest rates will continue decreasing in the coming months appear to have dented Qatar’s residential real-estate market growth in the third quarter of this year.

Mortgage transactions fell 10 percent in Qatar from July to September over the previous three months, and 8.5 percent over the same period last year, according to ValuStrat’s most recent report on the Gulf state’s property sector.

Sales also declined, by 18 percent on a quarterly basis and 15 percent year on year.

The slowdown coincided with the US Federal Reserve’s decision to begin lowering rates in September, with an initial 50 basis-point cut. The Qatar Central Bank followed suit by trimming 55 basis points to preserve the riyal’s peg with the dollar. 

“These concurrent changes could suggest that buyers may be holding off on purchases in anticipation of a more favourable decrease in rates,” Anum Hassan, ValuStrat’s head of research for Qatar noted in the report.

The Federal Reserve indeed made a second 25 basis-point cut in early November. 

The future direction of US monetary policy has become more uncertain after the reelection of former President Donald Trump to the White House. His proposals to impose stiff tariffs and deport millions of undocumented immigrants might lead to a new pick-up in inflation, according to experts.

Qatar’s real-estate market was otherwise relatively stable in the third quarter, according to ValuStrat.

Office and retail rents declined slightly, while industrial rents were flat or marginally higher.

A significant increase in the number of tourist arrivals, up 25.6 percent annually, helped to boost hotel occupancy by 23 percent over the third quarter of last year.

“This growth is primarily driven by government-hosted local and international events taking advantage of the cooler months,” Hassan wrote in the report.

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