Falling rents worry landlords

Ahmed al Wahaibi, partner of a leading contracting company in Ruwi, said: “New residential and commercial properties are mushrooming across the city amid a drop in demand.”

According to him, the drop in rents is because of a big increase in the supply of properties in almost all parts of Muscat.

At the same time, he said there has been a demand for single bedroom or studio flats.

“Many expatriates are leaving their families back in their home countries either to cut expenditure or out of fear due to uncertainty in the job market. This has led to a demand for smaller housing units,” he said.

Al Wahaibi said the average monthly rent for properties has fallen from a low of 20 per cent to a high of 40 per cent depending on areas and facilities in the buildings.

He said, “There is still demand for ‘A’ grade residential properties. Tenants are focused on good quality accommodation with well-managed facilities and amenities.”

Landlords can take advantage by upgrading the facilities, he added.

According to a recent report from Cluttons, rents during the first three months of the current year witnessed a decline with some locations starting to show even bottoming out.

Faisal Durrani, head of research at Cluttons (property consulting firm), said in the Spring 2017 Property Market Outlook report, “We tracked 12 locations in Muscat, four of which have no change this quarter. However, people are still nervous about job security and tenants are still shopping around for what they perceive as the best deal for them.”

Across the board, rents are at fresh historic lows and are roughly 60 per cent down from the market peak of 2008, said the report.