Oman residential market seen stable
Muscat, October 15, 2012
The overall economic picture is bright in the Omani residential market with the value of property traded in the first five months increasing by 59.7 per cent compared to the same period last year, according to a report.
There is a greater confidence and activity in the real estate market backed by an increasing availability of mortgage finance. The value of property traded in the Sultanate during the period rose from RO506 million ($1.3 billion) to RO808 million ($2.1 billion), said the report by real estate specialist Cluttons.
Although there has been significant development of residential properties over recent years, the residential leasing market continues to suffer from a lack of good quality, well-designed stock suited to tenant expectations and desires, the expert added in its report on the Omani residential market.
Cluttons pointed out that rental values for residential properties have stabilised to some degree, save for key
popular residential developments which are experiencing some price increases due to a shortage of supply.
According to Cluttons, there is a particular shortage of good quality villas in the central and western areas of the Sultanate in the range of RO1,000 to 1,800 ($2,600 to 4,700) per month.
When available, such properties are absorbed quickly at above average values, the expert said in its report.
Much of the demand this year is focused on good quality developments with amenities such as allocated parking, on-site gyms and swimming pools, green common spaces and children’s play areas, said Cluttons.
Tenants have become significantly more discerning, creating strong demand for these types of developments, which will continue to be in short supply throughout the next year.
Rental values have stabilised to a degree over the year, but it is evident that values in less favourable locations are continuing to show a downward trend.
Cluttons pointed out that the interest in the rental market for recently-completed apartments in the Tilal Complex in Al Khuwair has been extremely strong, reaching values of RO500 to 600 per month for a one bedroom apartment up to RO1,000 to 1,200 for a three-bedroom apartment.
This is significantly higher than the average rental figures for surrounding areas.
Cluttons said there was an increased demand from potential purchasers in the secondary market at Integrated Tourism Complexes (ITC) such as The Wave and Muscat Hills.
Interest is particularly strong for properties at The Wave, said the expert in the report. However, this increased purchaser interest has not translated into a significant rise in actual sales as the asking prices are higher than purchaser expectations, it added.
In its forecast for 2012, Cluttons said the trend for well-serviced, well-located properties experiencing a rise in demand and even some hike in rental prices will continue.
On the other hand, poorer properties in less favourable locations are expected to show some softening of rental values over the remainder of 2012, it added.-TradeArabia News Service