Proceedings of 10th Global Business and Social Science Research Conference

Proceedings of 10th Global Business and Social Science Research Conference
23 -24 June 2014, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-55-9
Assessing the Housing Market and Cost of Home Ownership
in Qatar
Salem Nechi
Despite the generous housing welfare allocations to nationals and tight restrictions on
foreign ownership of houses, housing prices in Qatar observed fast increase in the last
decade. In well-functioning markets, when prices rise, supply increases, and then prices
stop rising and sometimes even fall. By this definition, the housing market in Qatar is not
working. In fact, the demand for housing is expected to be moderate as housing welfare
allocations guarantee that each Qatari family has access to good accommodation.
Moreover, restricted foreign home ownership is expected to decrease the pressure on the
housing prices. On the other hand, the supply side is increasing in exponential way as
the private sector is investing in commercial and residential housing to accommodate the
increasing demand for rental units and secondary residence for nationals.
Although these developments in the housing market are unusual and characterize other
housing markets in the region (GCC countries, in particular), the high increase in housing
prices in Qatar (and GCC countries in general) did not attract enough attention in the
macroeconomic literature. In particular, the possible determinants of the house prices
dynamics in Qatar are left unexplored. The question of the implications of high housing
prices for the labor market is also left unanswered. In fact, given that the Qatari economy
depends heavily on foreign labor, high housing prices may have significant implications
for labor market. To the author knowledge, no significant studies attempted to quantify
the impact of these new trends in housing prices the labor market. In this paper we
attempt to fill in the gap.
The purpose of this study is two folded. First, we will review the housing welfare
regulations in Qatar with the aim to produce a survey highlighting the main benefits that
Qatari nationals get. Second, we will assess the historical link between the housing
prices and key macroeconomic factors such as income growth, population growth,
construct costs, etc. The effects of shocks to oil and gas prices (booms and declines) will
be investigated, too.
To provide a comprehensive assessment, we will employ an approach that combines
descriptive and quantitative analyses. The latter approach develops empirical tests to
disentangle the possible determinants of house prices.
Salem Nechi, College of Business and Economics, Qatar University, Doha, Qatar.