There has been a recent increase and improvement in the real estate market of Muscat, Oman, and its demand. The government’s target of bringing 21 million tourists by 2035 has also helped in this cause.
Though the overall situation is not ideal, the demand and supply of the market are imbalanced and low. As a result, the rental prices of accommodation are low, and the market is oversupplied with apartment blocks.
It creates an opportunity for affordable and inexpensive accommodations of the rental property in Muscat. Continue reading this blog to know more about the real estate market of Muscat.
Property Trends in 2019-2020
The 2019 statistics of the value of property traded showed a decline in Oman by 12.2%. However, recent studies showed an increase of 6.5% on the same.
The Vision 2020 scheme has helped in opening the doors for foreigners in the real estate market as it aims to reduce the oil revenue dependency. The right to own real estate has also been established for foreigners since February 2006. However, it is limited to ITC developments.
Expatriate owners and their immediate families have a right to residency on a purchase of property in designated ITC developments. These designated ITCs are Al Mouj Muscat (formerly The Wave), Majan Development Company, Wujha Real Estate, Muscat Bay (formerly Saraya Bandar Jissah), Al-Taher Group, and Muscat Hills Golf and Country Club.
These ITCs have always been the spot of attraction because of their beautiful designs, settings, and facilities. Let’s discuss them in detail.
1. Al Mouj Muscat
The Al Mouj Muscat, formerly known as The Wave, is one of the most popular choices with its rate of OMR 107,000 or US$ 278,000 on one-bedroom apartments in 2019. The average price for two-bedroom apartments was recorded to be OMR136,000 or US$353,250. And as for three-bedroom apartments, it was OMR139,000 or US$361,000. On the other hand, the fancy Villas in Muscat priced at OMR375,000 or US$974,000, making it a good deal as well.
2. Muscat Hills
The average price of one-bedroom apartments was OMR72,000 or US$ 187,000 in 2019 in the Muscat Hills, the lowest price being OMR 20,000 or US$ 51,950. As for two-bedroom apartments, the average price was OMR130,000 or US$337,700. The average price of three bedrooms in 2019 was OMR143,000 or US$371,400.
The average price of a three of four-bedroom Villa ranged at OMR 175,000 to OMR 295,000. The US dollars being $454,548 and $766,238, respectively. Five-bedroom villas are sold at the average price of OMR465,000 or US$1.21 million.
Along with these, there have been more newly launched off-plan apartment developments in Oman. They are :
3. Ruwi/East of Centre
The Ruwi/East of Centre is one of the main business commercials in the neighborhood of Muscat. The average price of one-bedroom apartments was OMR 51,000 or US$132,500 in 2019. At the same time, the three-bedroom apartments were sold for OMR 100,000 or US$259,740.
Another competitor of the real estate market lies in Qurum. Here, the one-bedroom apartments are sold for an average of OMR 85,000 or US$220,800, while the two and three-bedroom apartments are sold on an average of OMR120,000 or US$311,700 and OMR 150,000 or US$389,600 respectively.
5. Al Khuwair
Al Khuwair is a renowned business of the real estate. Here, the average price for two-bedroom apartments starts at a rate of OMR 43,000 or US$111,700, while three-bedroom apartment prices start from OMR 60,000 or US$155,800 according to 2019 statistics.
Bawshar is a relatively newly established residential area in the city of Muscat. Here, one-bedroom apartments are priced at OMR 49,000 or US$127,300. The three-bedroom apartments are sold for OMR 52,000 or US$135,000.
Laws of Muscat real estate, Muscat
There were certain rules and rental laws in Oman, but some amendments were made. They are as followings :
- Earlier, a landlord could increase rent in a span of three years. Now the rent can fluctuate as desired by the parties involved.
- There was a rule of a maximum 7% increase in rent. It has been removed now.
- The law for the earliest period a landlord could terminate a lease for commercial property was trimmed down from 4 to 3 years. In the case of residential properties, it was trimmed down to 5 years, and previously it was 7 years.
- Landlords can now retrieve expenses related to eviction notices served to non-paying tenants due to the new legal procedures incurred in lawsuits.
Some Statistics To Consider
The rate of occupancy in residential buildings stands at 70% in Muscat. The areas outside the capital of Oman stands at a 50% rate of occupancy in residential buildings.
The number of building permits in Oman was 23,881.000 units in 2018. The number of residential building permits displayed a decrease by 1.1%, to 23,881, in 2018, from 24,149 in 2017 and 31,868 in 2016.
According to the official sources in Oman, the sultanate’s Ministry of Housing allotted about 10,925 residential plots all over the country by the end of May 2019.
One reason for the decline in the occupancy rate of new residential units is the decreasing expat population in Oman.
The decreasing expat population in Oman is a result of the expatriate visa ban introduced by the Ministry of Manpower in January 2018 to reduce the numbers of unemployed locals.
Around 55,000 expats were laid off by companies due to this scheme that ultimately resulted in a decrease in the occupancy rate of residence. There was a noticeable effect on the real estate and rental market.
Though things have taken a turn and the market, especially the real estate market, is indeed welcoming to foreigners for rents and purchases under suitable and desirable circumstances.
Through this discussion, we can conclude that the rental property in Muscat has faced decreases. However, in contrast, there have been some recent improvements in this scenario.
Many new opportunities for purchase have opened up due to the sharp decline in demand leading to lower prices. The main areas of Muscat, more specifically the ITC developments like Al Mouj Muscat, Majan Development Company, AlRaid Group, and WUJHA Real Estate, offer amazing designs, locations and builds in a very affordable price range.
The circumstances of the real estate market are also open to purchasing made by foreigners. Plus, the government’s scheme to target more and more foreigners to increase its revenues and decrease oil dependency has also been effective in terms of the purchase of Muscat real estate, Muscat.
Overall, purchasing a property in Muscat, Oman, is a viable and beneficial option. Everything from one-bedroom apartments to five-bedroom Villas are available in the country of Oman with not only fancy looks but desirable locations.