Qatari banks face growing pressure from high exposure to the country’s sluggish real estate market, hit by oversupply tied to preparations for its 2022 World Cup, ratings agency Fitch said.
The tiny but wealthy Gulf state has seen its rental prices slide by 20 percent over the past three years. Analysts expect these prices to fall further as a wave of projects tied to the tournament come online over the next three years, said Reuters.
Qatar has had the added challenge of a diplomatic and trade boycott imposed by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since 2017. The move has hit tourism and dampened demand for real estate from foreign buyers.
“The real estate and hospitality sectors, already facing falling prices due to oversupply in preparation for the 2022 World Cup, have been further pressured by reduced tourism and occupancy rates resulting from the boycott of Qatar.”
Qatar injected about $40 billion into its banking system in the months after the boycott in order to boost liquidity.