OPEC production cuts to boost Qatar’s construction sector
The expected boost in oil prices following OPEC’s decision to lower oil production will benefit the construction sector in Qatar, according to a recent market report by a real-estate conglomerate
The OPEC and non-OPEC members’ decision to extend production cuts of oil for nine months until March 2018 will have positive impact on non-oil sectors, especially the real estate and construction markets in Qatar, according to the latest monthly realty report by a Qatari business conglomerate.
The real estate report, issued by the Market Watch Bureau of the diversified Doha-based SAK Holdings Group, said that the decision to cut down production will have positive effects on the real estate sector and will be an incentive for launching new projects.
The targeted cuts in production is expected to boost oil and Qatar will be one of the beneficiaries as a result of this fall-out, the report noted. Citing a recent Qatar National Bank (QNB) report, SAK Holding Group said that the projected oil prices growth in 2017–2019 will uplift government income, ease financial pressures and support investment spending programmes.
The monthly real estate report also observed that since the prices of building and construction materials continue to fall, real estate investors and developers will benefit from the declining prices and therefore relatively lower costs.
Cement, iron and sand prices are falling and Qatar National Cement Company's recent decision to reduce the prices of cement would accelerate the completion of existing projects in the advance to the 2022 World Cup projects.
The Qatari real estate sector will be one of the big beneficiaries of cutting down oil production. Oil prices increases are already beginning to positively impact the budgets and economies of oil-producing countries. It will decrease the deficit and lower inflation. This means that there will be an abundance of liquidity that will accelerate completion of key major projects and encourage the government to pursue new ambitious projects aimed at diversifying the economy, the report continued.