The rental values for residential apartments in Oman have stabilised to a large extent after the significant falls from its peak in 2008 with the expatriate community dominating the leasing market, according to a report.
There is a significant increase in the supply of residential apartments across the capital coupled with steady demand in established areas, said real estate specialist Cluttons.
In its Oman Q1 2012 residential market report, Cluttons pointed out that the economic development had progressed in the Sultanate over the course of 2011 but still remained heavily dependent on the oil and gas sector.
Encouragingly, however, there is evidence that the non-oil sector of the economy is also showing good growth as the Sultanate continues to try to reduce the economy’s reliance on hydrocarbons, said the expert.
Tourism too should receive a significant boost from the Sultanate being named one of National Geographic’s top 20 destinations.
Furthermore, Muscat, has been chosen as the Capital for Arab Tourism for 2012 whilst also receiving an international accolade by the Lonely Planet as the second best city in the world to visit.
In addition, a recent Government decision has also reduced the cost of a short-term tourist visa by 75 per cent from RO20 to RO5 ($52 to $13), further promoting and supporting Oman’s commitment to boost the Sultanate’s tourism sector into long-term growth, said the property expert which has enjoyed a dedicated Middle Eastern presence since 1976.
According to Cluttons, the demand for residential apartments remains good, particularly for the established central areas of Qurum, Shatti Al Qurum and Madinat Qaboos.
The coastal suburbs of Ghubrah North and Azaiba have become increasingly attractive through significant development over the years.
Properties at The Wave and Muscat Hills remain in demand due to their quality, setting and facilities, despite their separation from the central area, it added.
Whilst location is still a discerning factor in the rental market, Cluttons indicates that tenants are looking for well-designed, well-built properties, paying attention to features such as good quality fixtures & fittings, outdoor space, leisure facilities and excellent maintenance.
Interestingly, Cluttons said in its report the tenants were willing to compromise on the size and even location of a property rather than on its quality.
According to the expert, a clear trend that has taken shape over recent years has been a marked increase in demand for both one bedroom and fully furnished apartments. “However, around 75 per cent of the demand is for two and three bedroom apartments,” it stated.
Overall, the rental values for residential apartments have stabilised to a large degree after significant falls from the height of the market in 2008 but the general trend is for an on-going softening of rental values as the supply of residential apartments continues to increase, said Cluttons in its report.
“However, that good quality apartment buildings in the central areas will hold or even increase their value due to strong demand and the limited opportunities for further development in these locations,” it added.