Qatar real estate slump deepened in October

[DUBAI]A downturn in Qatar's real estate market deepened in October because of economic sanctions imposed by other Arab states, official consumer price data showed on Tuesday.

Housing and utility prices sank 5.4 per cent from a year earlier last month, their biggest drop for at least several years, after falling 4.7 per cent in September. They dropped 0.4 per cent from the previous month in October.

Housing prices were already in a downtrend before June, when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar, accusing it of supporting terrorism.

The sanctions have contributed to the property market's slide by hurting investor sentiment, stifling demand for Qatari property among nationals from other Gulf states, and tightening liquidity in the banking system.

On Monday, credit rating agency Standard & Poor's downgraded major Qatari real estate developer Ezdan Holding to junk status, saying the sanctions had worsened the country's operating environment. The company's share price has tumbled 47 per cent this year.

Overall, Qatari consumer prices rose 0.2 per cent from a year ago in October, after falling 0.5 per cent in September.

The return to positive inflation was partly due to food and beverage prices, which climbed 4.9 per cent in October, their biggest increase in several years. The sanctions have fuelled food price inflation in Qatar by disrupting routes for its imports, forcing importers in some cases to arrange more expensive channels.

REUTERS