by Homy Invest
We know this is the most interesting topic every one at Qatar and the world (Host of Worldcup 2022) wants to know the tournament effects on realestate sector. Firstly, what we are going to show in this article is a logical analysis for possible scenarios based on current economical data and expected trends locally and globally where each one can interpenetrate based on individual experience and background…
Based on the previous worldcup tournaments, the influence of such tournament is extremely positive on realetsate sector by all means but it doesn’t mean it would last as all previous worldcup register a huge drop down after the tournament. Moreover, as the event gets closer, the value of properties get higher based on expected investment return and the economic structure of the host country…
Basically, Qatar tournament is different due to many variables such as pluses & minuses:
- Wealthy country
- + Qatar has a strong capital to cover all requirements and beyond of the tournament before, during and after
- – It will affect the spending on other important sectors that not related directly to the event
- Small population
- + The country population is relatively small and hence the country can host more visitors, spectators to the event where they double the investment in hospitality sector to accommodate more people which will empower the tourism
- – Social change in the country culture rapidly during the event especially the Qatari Society is conservative community
- Growing economical hub
- + The economy is open for investors, entrepreneurs , and getting better day after day to form a vital dynamic environment for new business regardless the size
- – Lack of detailed guidelines, details, governing laws, regulations and it’s applicability on the local market
- Pandemic challenge
- + Qatar is considered one of the most successful countries which controlled the pandemic and that increases the global community trust in the capabilities to host the event
- – Health measures are unlike before and even with vaccine or medicines, the pandemic enforce another pressure/challenge on the host country on medical sectors, site mesures, responses plans for COIVD-19 or different health matters
- New infrastructures by all aspects
- + New roads networks, new venues, strong logistics services, integrated with the stadiums to form a strong grid
- – Maintenance cost, effectiveness of such infra, quality will be compromised due to time constrains
- Long span of worldcup development since 2010…
- + Usually, the worldcup will be announced 4 years before the event date; however, for 2022 it was announced 12 years earlier which gave Qatar the opportunity to plan well their resources and manage the work/cash flow/progress effectively to reach desired outcomes and minimize the errors or defects
- – Qatar searched for advanced technology to avoid being out-of-date due to the long time, so more pressure on the resources and many changes in the scope as time goes by…
Despite the geopolitical situation, the country is preforming very well to control and manage its resources to avoid any economical drop that might happen or at least to reduce its side effects gradually, so the economy will not have another shock after COVID-19 crises and hence the economy will heal gradually with proper correction for prices…
As a matter of fact, Qatar performed very well among those challenges and proved that it’s going to a new shift-up ahead from adjacent countries in a short time relatively to such development where other countries spent more than 50 years to reach their level today…
What will happen before and during the world cup for realestate sector? (Expectations based on current conditions)
- Units sales will boost up especially for investors till mid 2021
- Rental will go down as many jobs will be off as projects closer to completion
- Land, factories sales will start to boost slowly before, and during… (wait for this after)
- Hospitality properties will be sky high till the peak at the world-cup event
- Services properties/logistics units will boost till the peak at the event time
What will happen after the tournament is done? (Expectations only)
- Units rent will start to go down sharply and after 3 months will continue to go down on steady rate to new bottom line
- Units sales will stay high for 6 months, and then will start go down slowly except the logistical free zones
- Logistics areas will boost up again as investors will start considering Qatar free zones as a new hub
- Jobs rates will start dropping with more focus on facilities/properties management by a new concept to generate income
- Realestate ownership laws will be fully developed with more attractive features to maintain investors ownership
- Shops, offices, showrooms will start to shrink as big sharks of virtual-online will be start entering the local market
- International laws, contracts, systems will be a implemented for properties foreigners owners
- Medium, small identities will start slowing down locally due to international competitions
However, the geopolitical issues will have a major control on all the above, as it’s the main factor for money either to get-in or go-out of the market which is beyond our knowledge …
In short, the worldcup will enhance the local economy of Qatar to reach the peak at the event time, and then it is going to correct itself by going down sharply just after the event to a new limits, new laws, new business hub for gradual enhancements like what happened in South Africa, Brazil, and Russia where the economy was shifted to a new standards higher than it was before the event…
For Realestate sector, unless your properties are competitive, unique with attractive features for investors, or locals, the prices will go down sharply and cause the free-fall effect especially for sales as even local investors will look at global properties options; and for rent, it depends on how the logistics free zones, and tourism sectors will perform after the event.
