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[March 03, 2014]
New projects push up Muscat rental market [Times of Oman]
(Times of Oman Via Acquire Media NewsEdge) Muscat: New infrastructure development projects in Muscat such as the construction of new malls and roads, as well as the improved job opportunities they create, are attracting more people into the capital, pushing up the demand for real estate, according to Ismail Kamel, chief operating officer at ERA Real Estate.
The demand for residential properties is rising and there is no reason to expect a drop in rents for such buildings, Kamel told Times of Oman in an interview. Over the past three years, the Omani real estate market got introduced to very nice and well-equipped buildings, which helped push down rents for old and low quality buildings, Kamel said. "Prices are not going down, but old things have become devaluated. Whenever something new comes, the old one gets a lower price." He added, "The real estate market does not get affected in a day or a week or a month, and it takes a few years for a trend to change unless a major factor is at work. In addition to that, we need to note that an increase in a certain area does not mean a boom in the entire market." A lot of realtors in the market sometime causes price fluctuations by communicating to their clients false information pertaining to their property, Most of the information spread has no credible origin. People should be aware of such activities.
According to Kamel, the rent for a 1BHK in Muscat ranges from as low as OMR200 to OMR500 — for example in Qurum — depending on the quality and age of the building and the rent for a 2BHK in Muscat is in the region of OMR300 to OMR800. Kamel also said that the most popular areas for the people to live in Muscat on rent are Bausher, Azaiba, Ghubra, Ghala and Madinat Qaboos.Trend in rents Asked about the trend in rents for office buildings, he noted that the rental values for offices dropped significantly during the past three years, but the rent for Grade A offices is not expected to decrease and they are currently being rented for an average of OMR8 to OMR15 per square metre.
Rental values for Grade B and C office buildings will be stabilised or go down a little bit given the existing oversupply, he added.
He also said that the necessary measures should be taken to supply Grade A office spaces as few of what is offered in the market meet the necessary standards. Also the development of such areas should be planned using international best practices and providing adequate service and amenities, For example, Ghala area, which contains a majority of office spaces, has been poorly developed, he said, adding that the parking spaces for employees or even their guests are not enough to accommodate the anticipated traffic and the exit and entrance will be chaotic once all office buildings are occupied.
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