Exclusive : No increase in rents after new visa rules in Oman

MUSCAT : New family visa regulations, stipulating the reduction of salary ceiling from OMR 300 to OMR 150, have spurred the demand for 1bhk and 2bhk flats/apartments in several parts of the Muscat Governorate; however, it has not seen a corresponding increase in rents owing to the surplus of residential buildings.

According to top real estate companies in the country, 1BHK rentals are still within the range of OMR 100 to OMR 200, while 2BHK are, on an average, between OMR 150 to 350, depending on the residential area – with Qurum boasting top rentals.

To better understand the real estate trends and the changing tenancy landscape in the capital area, The Arabian Stories invited property dealers and real estate firms in the capital to share their perspectives on the topic. 

“We are of the opinion that it is still a tenants’ market as there are several options available in the market,” said Ridhwan Radzi (MRICS), Head of Research and Consultancy at Hamptons International, in reply to a question related to prospective increase in rents in the capital area. 

Ridhwan Radzi, Head of Research and Consultancy at Hamptons International

“There has been a concern regarding real estate occupancy and performance over the past few years driven by lower oil revenue and impact from the pandemic. The recent surge in real estate demand has seen occupancy levels in many residential developments stabilize, depending on the location and type of property… We observe rents to be stable but are likely to increase provided occupancy of units’ increase accordingly, signaling an early recovery of the market,” he added

Saud Khan, Vice President of Investments and Advisory at Tibiaan Properties, noted that rents have, indeed, stabilized in some part of Muscat during 2022/2023. “However, we do not think rents have started to increase on a general note,” he added. It is important to note here, as Khan explained, that overall expatriate population decreased sharply from 2019 onwards. “Resurgence in the population from FY 2022, coupled with opening up of investment opportunities in Sultanate will enable further stability in the residential segment,” he opined

Saud Khan, Vice President of Investments and Advisory at Tibiaan Properties

According to Al Habib and Company, rents of quality Grade A buildings have not fallen significantly, but that doesn’t apply to Grade B and C buildings, where rentals have dropped by about 15% owing to excess supply. “Close to 90% of the property market is residential,” said the Company representative.

Real Estate Trends in Oman:

Radzi of Hamptons explained thus: “The recent announcement of family visa regulations is expected to have significant impact on the residential real estate market, especially in Muscat. However, based on recent government population statistics (NCSI), it may be too early to measure its impact.

“Oman’s population has already been witnessing a steady month-to-month increase prior to the visa deregulation announcement as depicted in the NCSI chart. It is likely that the population increase may further accelerate, driven by the reduction of salary ceiling for family visas. This in turn is expected to result in increased demand for housing in the short to medium term, especially catering to families.”

Pointing out that there has been an increase of 20% in the number of expatriate employees by the end of 2022, compared to 2021, resulting in a 10 to 15% increase in occupancy, Al Habib representative said, “The new rule that allows expats to bring their families to Oman if they make a minimum of OMR 150 per month, down from the previous requirement of OMR 350 per month, has further shown signs of improvement in new enquiries and occupancy.”  

Presenting real estate trends against the backdrop of new investor policies, Saud Khan of Tibiaan Properties, stated: “If we are speaking about Investor Visa options then we are still not receiving significant numbers of family members. Largely, these investors are only issuing investor visas with very limited movement of family members as well. It can also be observed from the growth of expatriate population as reported by NCSI, where increase is primarily recorded in blue-collar segments.”

Has the demand for 1BHK & 2BHK flats increased in recent times?

Ridhwan, Hamptons: “We have seen a recent real estate demand surge driven by the increase in population. 1bhk and 2bhk flats have been popular due to the lower costs involved as we observe the Muscat housing market to be price sensitive. We may potentially witness even further increase in 1bhk and 2bhk demand from expatriate families as we also note that many companies have either reduced or removed accommodation allowance to cope with the pandemic’s impact.”

Al Habib: “There has been increase in number of expatriates, averaging about 28,000 a month, and thus the demand/inquiry for 1 and 2 BHKs have seen a marginal increase. The demand used to be more before May, followed by lean months due to summer vacation.”

Khan, Tibiaan: “We cannot say that overall demand has increased; however, certain areas are showing promising movement like Azaiba, Ghubra, Baushar, and Al Hail as well. This growth is also reflecting movement of expatriate population from old city areas like Ruwi, Darsait, and Wadi Kabir. However, products with good facilities like swimming pool, gym, and free WIFI are always more in demand by expatriate population.

Which are the areas sought by the majority of people?

“From Expatriate segment, increased demand has been observed in Al Khuwair, Baushar, Muscat Hills, Al Mouj, and even some parts of Al Hail as well, which is aligned with continuous movement of facilities towards western parts of Muscat… With the reduction in overall rental values during last few years, we have observed growing demand for units in Al Mouj and Muscat Hills largely due to more integrated community-based offerings,” said Khan.

Reiterating similar views, Al Habib representative listed “the areas around Al Khuwair, Bausher and Mawaleh” as more sought after.

And based on Hamptons’ recent publication, ‘Oman Real Estate Investment Guide and Muscat Residential Market Overview’, Ridhwan shared a chart* to outline the prime residential areas of Al Mouj, Azaiba/Ghubra, Shatti Al Qurum, Qurum, Muscat Hills, Al Khuwair/Bausher and Madinat Sultan Qaboos with average rents. 

“We should note that other areas, including Ruwi and Darsait to the east and Al Mabela, Al Mawaleh and Al Khoudh to the west are also considered popular by both Omanis and expats,” he said, adding, “We have seen areas with good schools being considered attractive to families. Distance to the office and access to immediate amenities are also high on the requirement list for the majority.” 

*Source: Hamptons International Research, March 2023; Note: General rents are noted to indicate gross rents per unit per month taking into consideration of vacant units with white goods and typical lease periods

Reference: https://hamptons.om/blogview/Oman%20Real%20Estate%20Investment%20Guide%20and%20Muscat%20Residential%20Market%20Overview/18)

Current Average Rent for 1BHK and 2BHK flats/apartments in Ruwi, Qurum, Al Khuwair and Ghala:

Hamptons: “We observe the following asking rents for these locations. Rentals largely depend on the exact location of buildings, provision of facilities and amenities, car parking allocations, age of the building and provision of furnishing.”

  1bhk 2bhk
Ruwi 100 – 200 150 – 250
Qurum 150 – 250 250 – 350
Al Khuwair 150 – 250 200 – 300
Ghala 150 – 250 200 – 300

Source: Hamptons International Research, May 2023; Note: General rents are noted to indicate gross rents per unit per month taking into consideration of vacant units with white goods and typical lease periods

Rental averages as per Al Habib: 

Ruwi – OMR 130 – 150 for 1BHK; OMR 180 – 225 for 2BHK 

Qurum – OMR 150 – OMR 200 for 1BHK; OMR 200 – OMR 275 for 2BHK 

Al Khuwair – OMR 130 – OMR 180 for 1BHK; OMR 200 – OMR 250 for 2BHK

Ghala – OMR 150 – OMR 180 for 1BHK; OMR 180 – OMR 250 2BHK

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The post Exclusive : No increase in rents after new visa rules in Oman appeared first on The Arabian Stories News.

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