FIFA scandal: A penalty against Qatar’s property?

The proposed Doha Port Stadium

The ongoing FIFA scandal could leave investors in Qatari property conceding heavy goals, experts have warned.

The country’s property prices have increased since the announcement that it would host the 2022 World Cup. According to emerging property portal Lamudi.com, land values in Al Shamal, home of the proposed Al-Shamal Stadium, have risen 20 per cent between 2011 and March 2015, followed by Umm Salal (19.5 per cent) and Al-Rayyan (14.6 per cent).

The rises, not unlike the stratospheric climbs recorded in Dubai during the emirate’s real estate boom years, have been a boon to developers.

The proposed Al Shamal Stadium

“The Fifa World Cup has contributed to the increase in developers in Qatar, affecting the prices of areas where stadiums are being built, as well as in neighbouring areas,” says Lamudi’s recent report.

“Developers have resorted to building luxury property as opposed to affordable housing because of the higher return on investment and higher margains.”

Qatar’s property market currently allows foreign freehold ownership in certain zones. Owners of property and investors, though, could see themselves losing out, after allegations of corruption in FIFA have rocked the football world.

US prosecutors, via the Swiss authorities, arrested 14 senior figures last week on charges of bribery and corruption in the organisation. The scandal erupted just before elections were held for the president of FIFA, a vote that incumbent Sepp Blatter ultimately won – only to resign four days later.

Now, there is speculation that the decision to award the 2022 World Cup to Qatar could be vetoed and voting reopened.

The proposed Umm Salal Stadium

There is a “very, very strong case” for revoting, should the allegations of corruption be proven, Scotland’s First Minister Nicola Sturgeon said today , ahead of a friendly between the gulf state and her country tomorrow,

Qatar has hit back, saying that there is no chance it will be stripped of the right to host the event, blaming the allegations against “prejudice and racism”.

“It is very difficult for some to digest that an Arab Islamic country has this tournament, as if this right can’t be for an Arab state,” Foreign Minister Khaled al-Attiyah told Reuters .

Scandals have also surrounded the development of the stadiums in Qatar, with international groups questioning the treatment of migrant labourers, which make up a large portion of the nation’s work force.

“Nepalese migrants building the infrastructure to host the 2022 World Cup have died at a rate of one every two days in 2014,” the Guardian reported in December 2014.

A report by the International Trade Union Confederation also claimed an estimated 1,200 migrant workers had died since world began on the tournament’s stadiums, which was used as the basis of a graphic by the Washington Post that has since gone viral around the web.

The proposed Al Rayyan Stadium

Qatar has also flatly denied these allegations.

“An article in the Washington Post on 27 May claimed that 4,000 workers are likely to die while working on World Cup sites, and that some 1,200 had already lost their lives. This is completely untrue,” said the Qatar News Agency . “In fact, after almost five million work-hours on World Cup construction sites, not a single worker’s life has been lost. Not one.”

What it is certain, though, is that just as the preparations to host the tournament have stimulated the property market, the allegations of corruption have the potential to impact the market too.

“If Qatar gets caught up in the scandal, it will affect its brand reputationally and could cast a negative shadow over investment into the country,” Adam Challis, head of UK residential research at JLL, tells The Telegraph . “If anything, it would increase the appetite of Qatari investors to ship their money overseas into places such as London.”

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