R E AL E S TAT E - OMAN
Mixed impact
The demand in the residential segment in Oman has been to a great extent endogenous, says Global Investment House in its latest GCC Real Estate Report. Excerpts from the report
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ike other GCC countries, Oman witnessed considerable growth in its real estate sector prior to the global financial crisis. However, the year 2009 witnessed a sort of stagnation in real estate contribution to GDP. As indicated by Ministry of National Economy, the sector continued to grow at marginal rates of 1.1%, 0.3% and 0.4% for the first three quarters respectively. This was reflected on the trading activity that dropped by 53% reaching 1.19 billion rials in 2009. This figure is to be compared with 2.5 billion rials of trading activity in 2008.
and rentals are showing some stability in general with tendency to increase in prime locations in the range of 10% to 15% during 2009. According to the Ministry of National Economy, the price index for rent stood at 138.6 for the year 2009 compared to 124.4 in 2008, or 11.4% growth.
However, despite the decline in the trading activity, the crisis had little effect on residential prices and rentals. Both prices
Moreover, the country witnessed a sort of shifting of headquarters of many business houses towards Oman from other GCC
12 OER DOSSIER March 2010
On the rentals front, there were rumors that residential rentals will decline drastically due to the financial crisis and that expatriates are leaving the country due to recessionary pressures. However, this did not happen due to the stable economic performance.
countries. Such trend had its impact on rentals that started to pick up significantly especially in prime locations with a new element of quarterly payment of rents added to it. Rentals for two bedroom apartments were in the range of 450–850 rials per month in Al Ghubra, Qurum, Azaiba and Al Khuwair depending on total area and quality. Sale prices, on the other hand, average around 580 rials per sqm, while reaching more than 1100 rials per sqm in high end residential areas.
Market Forecast In the residential segment, the future trend is expected to be stable. Demand in Oman has been to a great extent endogenous. The population in Oman is growing, at