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How Qatar World Cup 2022 will Influence Real Estate Business?

04/01/2020 11:46 AM

Qatar is gearing up for FIFA World Cup 2022. Construction of the stadium is in full swing with a global workforce at the helm to get eight state of art stadiums ready for World Cup 2022. The country is building nine malls and putting its efforts into constructing commercial spaces. Qatar needs a minimum of 60,000 hotel rooms for the world cup. Currently, the country has 26,500 rooms and will increase the capacity by 2022.

With so much activity happening and a big event on the way, what would be the impact on the real estate business in Qatar ? Will this lead to an oversupply after the world cup?

When the World Cup was hosted in Brazil and Russia, the real estate sector of these countries witnesses a downturn. Will this be repeated in Qatar?

The drop in oil prices and the downturn in the Gulf has resulted in an oversupply of properties in Qatar. Compared to June 2017, the real estate prices are down by 10 % and the rents have come down by 20% over three years. The Q2 2019 data shows a continuing correction in property values and rents across the nation. The Qatar real estate investment witnessed a sharp drop with investors preferring to be cautious.

How will the World Cup affect the Qatar real estate market 2022?

Analysts have attributed the current softening of real estate business in Qatar to the fiscal consolidation programme of the Government. The event is a matter of pride for the country and hence Government has been allocating more capital to the projects related to the World Cup.

The World Cup project includes stadiums, metro with 3 lines, 2 new cities, and more. The result of this heavy expense is reduced spending by the Government, especially in the general real estate market in the country..

  • Many experts do not expect the world cup to have any lasting impact on the real estate market of the country. An increase in the occupancy of rooms in the hotels and a hike in the charges is expected. However, post-FIFA World cup things are expected to return to normal.

  • You can expect a fall in property values and rentals for around a year after the world cup. This would happen because many people who are currently in the country to work on projects related to the world cup are boosting the demand for residential spaces at the moment. Once, the event is over they would leave the country and this would lead to a fall in the demand for both residential and commercial spaces. This trend was displayed in both Brazil and Russia when they hosted the world cup in 2014 and 2018.

  • However, the medium-term outlook for real estate business in Qatar looks positive because of the support extended by the government with legislation like the freehold property law. As a result, the Qatar real estate market 2022 is expected to bounce back faster than it happened in Brazil and Russia.

  • The freehold law allows foreigners to own properties in Qatar. This step would entice foreign investors into the Qatar real estate investment and also reduce the dependency of the real estate sector on government funds.

So, the question is how real estate will fare after the world cup? The oversupply of real estate properties in the market has to be matched by an increased demand. The total retail space has already doubled in three years. The real estate business in Qatar doesn't have a clear answer to this question. It is a wait and watch mode to know the future of Qatar real estate .

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