Saturday, 23 Nov 2019 | 26 Rabi Al Awwal 1441
Rental market hit hard by falling expat numbers

Rental marketplace hit tough by falling expat numbers

Owners who have been rapid to adjust the asking rents downwards, and who provide excellent upkeep solutions, are enjoying larger occupancies than these who are significantly less versatile on rents and who do not preserve their buildings effectively,” stated the report.

Location is also a important element, with rents and occupancies in well-liked areas, declining significantly less than these in other places. “The declines are less in popular locations like CBD, Qurm, Al Khuwayr and Ghubra while higher in Wadi Kabir, Ghala, Amerat and the areas beyond the airport.”

According to the organization, the demand for genuine estate is driven by the job marketplace. The total quantity of expat workers has gone down from a peak of 1,854,880 as on December 31, 2017 to 1,787,447 as on December 31, 2018, a reduce of 67,433 (three.64 per cent).

“However, a closer appear at the numbers shows that the quantity of expats who hold a diploma and above has gone down, in the final two years, from 159,506 to 142,989, a decline of 16,517 (10.36 per cent).

In most circumstances, enquiries are not from the newly arriving expatriates but from these currently in Oman, searching for to move to more affordable or far better accommodation. “This has resulted in declining rents as well as occupancy and rental incomes taking a double hit.”

The total quantity of Omanis in the private sector has gone up from 223,083 as on December 31, 2016 to 251,009 as on November 30, 2018, an improve of 27,926 (12.five per cent) in about two years. “Oman now produces a quantity of higher college and college graduates each and every year, and it is organic that they will replace expatriates, particularly in white collar jobs.

“We forecast a further decline in rents and occupancies as more white collar expatriate employees are replaced by Omanis. In general, Oman has, among the highest home ownership, in the world. Omanis prefer to live in their own homes, sometimes in extended families, till they are able to buy/build their own houses. It is also common for more than one Omani in a household to be employed while it is less common in expatriate families,” the report stated.

Office marketplace

Rents have declined sharply in nearly all areas and occupancies are even a lot more of a issue, stated the report. “CBD is the worst affected with major banks shifting to locations that are fast growing. “Rents in CBD are RO2.5per sq m per month and sometimes even lower. In the more attractive areas of Qurm, Al Khuwayr, Azaiba rents are RO5-6 per sq m per month and sometimes below. Filling up newer buildings (even grade A office space) in popular locations is taking years.”

Housing mortgage

Villas are mainly for self-occupation and a single would count on demand to be steady with increasing employment of Omanis. “However, the figures indicate there is slackening of demand here too. The latest statistics show that the number of residential building permits, in all of Oman, has declined to 24,149 in 2017 from 31,912 in 2016 and 34,925 in 2015. Surprisingly the drop is steep (more than 50 per cent) in Muscat and Dhofar and less in the smaller governorates.”

Retail

With 3 malls, that are anticipated to host about 700 outlets, coming up in Muscat in the subsequent couple of years, and with a quantity of malls opening in Salalah, Sohar, Nizwa and Sur in the final couple of years, the retail sales are stagnating.

“Retailers are struggling to break-even with increasing outlets catering to the same volume. The newer malls will find it challenging to fill up, and collecting rents is not going to be easy from struggling retailers. Some of the mall owners are offering space free on a long-term basis and sometimes providing subsidy for interior fit out.”

Information Source: Muscat Daily

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