Ending its three-and-a-half-year split, Qatar is finally back into the GCC family. The restoration of relations will attract invaluable investments from affluent Qatari investors into the UAE. This will have a significantly positive impact on the economy and is also much-needed for the recovery of UAEs retail and hotel sectors.
UAE’s Stand on the Matter:
The UAE joined Saudi Arabia, Bahrain, and Egypt on Jan 12, 2021, in signing an accord with Qatar during a summit of Gulf Cooperation Council (GCC) leaders. The UAE government has already announced to reopen its borders and airspace with Qatar after a long conflict and has already commenced the commerce and travel with Qatar.
The trigger behind this move was Saudi Arabia announcing to settle its long conflict with Qatar and restore diplomatic ties and its allies will follow suit during the annual Gulf Arab summit which took place on January 05, 2021, in Saudi Arabia’s desert site of Al-Ula.
Why is Qatar So Important for the UAE Real-estate Sector?
According to the World Bank, Qatar’s economy is expected to grow 3% in 2021 and is amongst the fastest growing economies in GCC nations. Qatar is the richest country in the world in terms of per capita income. The country is expected to attract billions of dollars of investments as it is slated to host the FIFA World Cup in 2022. Qatar will be investing a major part of these investments in the real estate, tourism, and hospitality sector across the GCC nations which will also spur the growth of the UAE economy.
Qatar has been a second home for UAE businesses. They have a long tradition of operating in Qatar as the country offers a significant cost-advantage and access to the consumer base of 2.8 million.
Here are the top four reasons that make Qatar a Key to Success for UAE Real-estate:
Investments: Prior to the severing of ties in 2016, Qatari investors were amongst the top 10 most active investors in Dubai’s residential market. As per the figures released by Dubai Land Department (DLD), real estate transactions from 2016 exceeded AED 91 billion from 55,928 investors. This included 1,006 investors from Qatar purchasing a property in the emirate.
Tourism: Qataris have one of the highest spending-power in the world and an affinity towards luxury properties which is expected to underpin stronger demand levels in this market segment. An exponential surge in the inbound tourism in Dubai from corporate and leisure travel from Qatar will have a favorable impact on Dubai’s commercial as well as the residential property market.
Trade: Qatar has huge trade with the UAE. The total trade with the UAE stood at $3.5 billion just before the year the embargo was imposed in 2017.
Economy: The restoration of relations will also have a profound impact on the UAEs economy. The reopening of Emirati airspace to Qatar ahead of the 2022 FIFA World Cup, will attract over a million soccer fans from across the globe which will bring considerable revenue for UAE airline companies and will be a big boost for the real-estate sector as well as for the economy.
The resolution will also enhance the prospects of optimum utilization of socio-economic benefits of international air connectivity.
The Impact on the UAE Real-estate Sector:
The real estate sector in the UAE will be the biggest beneficiary from the end of a diplomatic crisis with Qatar as the country is amongst the top investors. It will foster a free flow of capital in the UAEs regional marketplaces.
The industry experts believe that the UAE real estate and infrastructure sector will gain a lot from the deal as Qatar. UAE is expected to witness an exponential surge in its investment as high-spending Qatari tourists which were previously key consumers of UAEs luxury goods and hospitality services are getting ready to spend their fortunes on experiencing UAE’s lifestyle. Furthermore, the move will also open doors for UAE companies to operate in Qatar’s rich market which has one of the highest consumer spendings in the world. The deal will also work wonders for Qatar as it will leverage UAE’s geostrategic to gain wider access to the markets.
The experts also believe that if things become normal between the two nations, there can be an incremental trade growth of 10% which is indeed a ‘glad tidings’ for the UAE real-estate sector.