New houses, exit of expats lower rents

Last year saw average rate fall of 8pc

On the back of a downturn in residential rent values and supply outstripping demand, tenants are now on the drivers’ seats with more negotiating power.

Till recently, landlords dictated the rent. The situation has changed now with more flexibility both in rents and contract terms, say property analysts and owners.

About a few years ago, demand was very high that landlords enjoyed more control over rental negotiations. Tenants then had to fork out a huge amount to rent a house in many areas in the capital city.

When Observer dialed a ‘for rent’ number, the landlord offered a three-bedroom flat at as low as RO 275 in Ruwi. The flat, which has been vacant for more than six months, was rented at RO 400 a few years back.

A flood of new properties coming onto the market and departure of expatriates have been identified as the reasons of the rental drop.

“The situation has changed now. Availability of flats and villas has increased manifold with supply outstripping demand. Residents are looking at how they can minimise their expenses as the lowest as possible”, said Saif bin Salem al Wahaibi, partner of a contracting company in Ruwi.

The economic downturn has brought obvious challenges as companies are trying to adjust to the market conditions by reducing headcount and housing allowances, he said.

Tenants are either handing in their keys because they can’t afford to pay rent anymore or they are renegotiating both their rent and their rental payment terms.