Muscat: An official real estate index to strengthen regulations for the property sector will be created by the Ministry of Housing on the directive of its minister, Sheikh Saif bin Mohammed Al Shabibi.
Abdullah Al Mukhaini, Secretary of Land Registry at the Ministry of Housing, confirmed that the ministry is about to establish the index for real estate market prices in coordination with competent authorities such as the National Centre for Statistics and Information (NCSI) and some real estate offices in the coming weeks.
Al Mukhaini said that index formulation is an ongoing process as the ministry is cooperating with the NCSI to build a record base to arrive at a real estate index. "The ministry is waiting for the National Centre for Statistics and Information to complete its task as we plan to launch the index immediately after approving it," said Al Mukhaini.
He added that the ministry had forwarded its proposal to the NCSI to develop the index. "Our proposal depends on three approved real estate offices as the ministry takes into consideration their buying and selling records and updates the ministry's records every three months," said Al Mukhaini.
"The ministry already has a display showing the average price of land in the Sultanate," added Al Mukhaini.
'Not a big issue'
Regarding the challenges that affect the stability of the real estate market due to the existence of expatriates in the market, Al Mukhaini explained that it is not a big issue as many see it.
He said that real estate transactions record available with the ministry shows no involvement of expatriates in the market. "The involvement of expatriates in real estate transactions does not mean that they are into brokering. Sometimes, the ministry deals with expatriates as representatives of companies or individuals," said Al Mukhaini.
He noted that the ministry does not deal with expatriates in cases in which they are found to be acting as real estate brokers. Although the ministry rarely approves transactions of expatriate representatives, the ministry recommends companies and individual to assign Omanis for such transactions.
He explained that in 2010, amendments were made to the real estate sector rules, providing for punishments to any unlicensed real estate brokers with fines and imprisonment. The amendment forced the real estate brokers to pass a specialised training course offered by the Ministry of Housing.
The ministry is also establishing a directorate-general for regulating the real estate market and its products. Al Mukhaini said the directorate would play an active role with respect to oversight and legislation in the real estate market.
He added that the ministry would be the primary feeder of cadres and experts for the directorate. "We expect the directorate to participate in the real estate market soon. The idea of the directorate came from the Cabinet which wanted formation of a committee comprising personnel from a number of ministries and the Oman Chamber of Commerce and Industry (OCCI) which represents the private sector. The committee came up with three suggestions, including the launch of Real Estate Regulatory Department which comes under the ministry, a directorate-general for regulating the real estate market which comes under the Ministry of Housing, and an Independent General Authority to regulate the real estate."
The directorate will focus on different areas of the real estate market, especially issues like brokerage, for which there is a Royal Decree that needs to be implemented. Separately, the Oman Real Estate Association is going to launch its own real estate index.
Al Mukhaini pointed out that both indexes would track the rise and fall in the value of properties in different areas and land uses.
The Oman Real Estate Association's index is valued by the ministry as it will assess it and decide later if it can benefit from it.
Oman's real estate sector recorded a remarkable recovery due to factors like population growth, increased demand for housing for young people, especially married couples, and the remarkable growth of investment in the infrastructure in the Sultanate.
The volume of real estate transactions in 2013 increased to OMR2.3 billion, thus recording an increase of 34 per cent from 2012 figures.
Regarding the accuracy of the index, Al Mukhaini explained that although there are agreements between buyers and sellers to reduce the selling price of real estate to incur lesser tax, which can affect the desired transparency of the index, the Land Registry staff can check such abuses through their accumulated experience.
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