Oman


Ageing buildings struggle to rent space in Oman


For illustrative purpose only

Muscat: Lack of parking slots, traffic-choked lanes, and ageing buildings vying with too many new ones for renters, have all combined to put a downward pressure on rents in some areas of Muscat.

The trend in other areas, however, is the reverse, as better facilities and infrastructure are generating demand and pushing up rent.

In the case of older residential units, rents have fallen by 10 percent in some areas during the first quarter of 2014. "This is simply because there is more supply in some areas than what is required," a real estate owner said.

A  reason for falling rents in Ruwi is the parking problem in the area. "Most of the buildings don't have their own parking lots and the area is slowly becoming very crowded, since there are huge traffic problems," Vinod Kumar, a real estate businessman, said. 

Further, many commercial businesses have moved out of Ruwi, forcing people to move to other areas. "But the real strugglers are the owners of the old buildings, who are finding it tough to let out their apartments," a real estate man said.

Realtors also point out at the changing skyline around Ruwi as a reason for the depressed market conditions. Most of the existing buildings were built after 1960 but new ones are coming up.

"A large number of new buildings are coming up in areas like Ruwi, Darsait and Wadi Kabir, which is pushing rents down in older buildings," said the property manager of a large property consultant agency.

The scene is, however, different in Ghala, Ghubrah and Azaiba, where too a large number of buildings are under construction. "But you have to remember, that in these places the demand is also greater, as a large number of companies have shifted their operations from Ruwi to those areas in the last couple of years," another real estate agent said.

In Al Khuwair and Ghubrah, most buildings have community halls, swimming pools and other facilities. "So there is great demand for these buildings, which is raising the rents in these areas," he said.

Barring those, there have not been many changes in the rent scenario in Muscat, except for a slight correction on the lower side of rents during the first quarter of 2014. "There are not any remarkable changes. Only in some cases, rents have gone down a few rials at the time of renewal of agreements," Country Manager of Eqarat, Salman Jalil, said.

Citing examples, Salman Jalil said some residents who were paying OMR360 are now paying OMR350. "That is the correction we are witnessing during renewals of agreements," Jalil added.

Further, real estate agents say that in the first quarter of 2014, Muscat rents have stabilised from their peak rates of 2007-2008.

Asked about future prospects, the realtors said that the rental market in Oman is at a very interesting stage, and that any fall in rents in the future would depend on the overall performance of the economy. "As of now, the market is stable as expatriate demographics play a crucial role in the rental scenario, and in the current situation it looks as if the usual pattern is set to change," one of them added.


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