Oman residential market subdued on oversupply
KEY FINDINGS: 2018 Oman Market Report reveals several key insights into trends in the local real estate market, which will likely continue into 2019
Market-leading real estate consultancy and chartered surveying firm, Cavendish Maxwell, has released its Oman Market Report for 2018. This marks the second comprehensive report on the health of Oman’s real estate industry, covering the residential, office, industrial, retail and hospitality sectors within the industry. The unique, in-depth market report was compiled by the firm’s in-house strategic consulting and research team, in collaboration with its extensive client and partner portfolio, based on official data from the National Centre for Statistics and Information (NCSI), Ministry of Housing and the Ministry of Tourism in Oman.
The 2018 Oman Market Report reveals several key insights into trends in the local real estate market, which will likely continue into 2019.
In the residential sector, prices continued to decrease as demand remained subdued overall. The report indicates that Muscat’s residential market continues to be oversupplied with apartment blocks, despite a gap in the market for high-quality villas and townhouses.
In the office sector, demand for business centres increased in 2018 as a result of firms downsizing and seeking fitted office premises at lower costs. Demand for Grade A stock is expected to remain stable and developers should benefit from current market conditions and lower costs to build.
Despite weaker consumer sentiment and sluggish market conditions, the retail sector witnessed developers adding more space to the existing stock in Oman, particularly in Muscat. In 2018, several new malls entered the retail market, including Landmark Group’s Oasis Malls in Suhar and Salalah. Al Araimi Boulevard, Mall of Oman and Mall of Muscat will all add more retail space as they near completion.
New regulations and incentives from Oman’s Ministry of Tourism have helped boost Oman’s hospitality sector. Cavendish Maxwell also notes that there are currently 72 hotels under construction in Oman, amounting to a total of 6,604 rooms. By the end of 2019, 55 of those developments are expected to be completed, adding 4,763 rooms to the Sultanate’s hotel supply, providing a much-needed boost to the tourism infrastructure.
Oman’s total merchandise exports rose by 30.9 per cent during January to September 2018, compared to the same period in 2017, despite growth in the industrial sector being muted due to reduced global prices and weaker consumer sentiment. Government initiatives like The National Programme for Enhancing Economic Diversification (Tanfeedh) and the establishment of new industrial estates offering investors tax exemptions and competitive advantages on imports and custom duties could provide the necessary boost to the sector.
Commenting on the report, Khalil al Zadjali, Head of Cavendish Maxwell in Oman, said: “Oman’s real estate market showed slow growth in 2018, but there were improvements in certain areas. Real estate transactions increased by 1.2 per cent compared to 2017, although sales contracts decreased by a percentage point. Other significant areas of development have been in the tourism and industrial sectors, with new hotel room inventory and industrial estates expected to be added in 2019.”
Looking ahead to 2019, Oman continues to offer significant investment opportunities, thanks to its growing non-oil economy, particularly in the aforementioned tourism and industrial sectors, as well as in Integrated Tourism Complex (ITC) developments. Cavendish Maxwell’s report highlights the positive impacts of new visa regulations for tourists, allowing more international visitors to enter easily and spend longer periods in Oman. It also offers insights into existing and upcoming hospitality infrastructure across the Sultanate.