House rents may fall with expat visa curbs: Experts

Energy Tuesday 30/January/2018 22:42 PM
By: Times News Service
House rents may fall with expat visa curbs: Experts

Muscat: The real estate sector in Oman is likely to suffer in 2018 with new laws restricting expat workers and an oversupply of properties from previous years, experts say.
Reports from international real estate companies reveal that the market is struggling, with the United Kingdom-based Cluttons suggesting that rents may have bottomed out in 2017. However, real estate experts believe that the market is still falling and the new laws restricting expat visas will add to the decline.
“There is an effect due to the new expat laws. With fewer expats coming, there will be fewer people renting houses, so the market will go down this year. I think the only way is to allow more freedom for expats.
“Once they come in, they have to rent a house, buy a car, bring their family and send their children to school. All of this is a boost to the economy and without it, the real estate sector will go down,” said Ammar Al Safar, rental in-charge at the Al Qandeel Real Estate.
According to the Cluttons report, the real estate market in Oman fell by 25 per cent on average last year, with some areas in the Muscat region seeing a drop of more than 50 per cent.
“It has a lot to do with demand. If there is low demand, the market is going to suffer. Expats are normally the ones who rent houses, so they help in the real estate sector’s growth. If there are fewer expats coming, either Omanis that get those jobs must start renting spaces or the market will see a drop in demand,” noted a real estate agent.
Some developers, however, have a positive outlook. Sudhakar Reddy, CEO of Al Habib and Co LLC, said with jobs being created, Omanis are going to replace expats as tenants and the market will improve.
“The market had bottomed out in 2017. Jobs are being created in Oman and the economy is growing, so we expect the real estate sector to grow too. Omanis, who will be the recipients of the new jobs, will now be the tenants in developments. Moreover, we will see supply slowing and the market will balance by 2019,” he noted.
Reddy added that in the future, real estate companies will fight for quality and there will be greater demand for premium properties, so developers must begin to look at quality projects.