Opec decision a boon for construction sector: SAK

The Opec & non-Opec members’ decision to extend production cuts of oil for nine months to march 2018 will have positive impact on non-oil sector, especially the real estate market, noted a latest report.
The real estate report, issued by the Market Watch Bureau of SAK Holding Group, said that the decision to cut down production will have positive effects on the real estate sector, and an incentive for launching new projects.
The greater cuts in production would lead to a reduction in supply at a good rate to ensure the exit of the bottleneck of oil prices that besiege the economies of oil producing countries, forcing some to take austerity measures, and others to withdraw from foreign exchange reserves to fill gaps in their budgets.
Qatar's economy is going to be one of the top countries that will benefit from oil prices improvement, the report said.
Citing a QNB report, SAK said that oil prices growth in 2017 – 2019 will uplift government income, ease financial constraints pressures, support investment spending programme, the price of Brent crude oil is expected to reach $55 a barrel in 2017, from $45 a barrel in 2016, and rise to $60 a barrel by 2019.
SAK's Market Watch Bureau says that the real estate investors trends show that the advent of Ramadan, the calm in the market will remain the dominant feature. The lull will lead to further declines in prices, the owners need to consider reducing rents of a variety of residential units, especially those that do not offer competitive services advantages and for its residents.
The report pointed out that tenants are trying to benefit from the new situation. They are trying to obtain a new housing unit of lower rental value, and better competitive services and advantages, which will put pressure on rental rates and at varying ratios.
The monthly real estate report predicts that building and construction market will continue to decline because the prices of building and construction materials in foreign and regional markets are slashed, in order to benefit investors and developers from the positive effects of falling prices in terms of the total cost of real estate investments. Cement, iron and sand prices are falling.
Qatar National Cement Company's decision to reduce the prices of cements would accelerate the completion of existing projects and start building the 2022 World Cup projects.
The real estate sector will be one of the big beneficiaries of cutting down oil production, it will decrease supply and thus improve prices. Prices increase have a positive impact on the budgets and economies of oil-producing countries. It decreases deficit and inflation. This means that there will be an abundance of liquidity that will accelerate completion of key major projects with ease, build new ambitious projects aimed at diversifying the economy.