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Economic sanctions upset Qatari home prices

18-Aug-2017


Doha, Qatar after a sandstorm. Sven Hansche/Shutterstock

Property Report

The Qatari real estate market is reeling from economic sanctions being imposed on the state by its Arab neighbours. 

Housing and utility prices in the country dropped 3.6 percent in the year to July, their biggest plunge in years, Reuters reported, citing government data issued Tuesday. The prices dropped 0.6 percent on the month.

Saudi Arabia, the UAE, Bahrain and Egypt meted out punitive measures against Qatar in June in the wake of accusations that the latter is sponsoring terror elements and getting on friendlier terms with Iran. The foregoing countries withdrew deposits and loans from Qatar, reducing liquidity in its banking sector. 

Housing and utility prices sank 2.9 percent year-on-year that month. Reuters cited anecdotal reports of citizens from Saudi Arabia, UAE, and Bahrain offloading their real estate investments in Qatar. 

While the number of Qatari building permits issued in June and July has not evinced a significant shift in trend, it does not take into account the lag between applications and approvals. Experts believe developers could delay construction on projects even with permits.

The embargo is taking its toll beyond housing. The closure of the Saudi-Qatar border, for instance, is stoking demand for more imported necessities into the country of 2.7 million. Food and beverage prices in turn soared 4.5 percent in the year to July, their fastest inflation rate since 2014.

The annual inflation rate rose to 0.8 percent in June.


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