Qatar construction projects hit by crisis

The global economic crisis is affecting a number of local construction and real estate companies in Qatar, hindering their operations and has even forced them to freeze work.

The global financial slowdown kicked off a slump in the sale of real estate, which in turn led to the decline in the real estate and construction market. The real estate market has been a magnet for investment for individuals as well as industry investors, due to the high returns it gave in the four years leading up to the crisis.

The construction boom experienced by the Qatari market led to land and property prices reaching unprecedented highs that went against all forecasts at the time. But this was followed by a harsh slump, much to the despair of many construction companies, real estate developers and property businesses.

According to reports in Al Sharq, the downturn in activity in the construction sector has severely affected businesses tied to the industry, including property sales and marketing. Many of the frozen projects were planned during the construction boom, with their costs and expected returns calculated on the basis of the conditions at the time. These projects now seem financially unviable and of too high a risk to continue.

Real estate buyers are currently waiting to see how far prices fall before they get back in the market in order to get the lowest prices. This has caused many property brokerage firms to shut down their outlets around the country in order to cut down on expenses, and to minimise the effect of the economic crisis on their business, according to Zawya.com.

Many real estate analysts say the current slump in the construction sector is due to miscalculations and a lack of planning by businesses. Analysts say a correction in the market was expected very soon, and the companies should have kept this in mind as busts and booms are a part of any commercial activity.

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