Rising rentals have forced the Oman government to make drastic changes to rental laws in the country. This law will cap annual rental increases at 7% in a measure expected to protect tenant rights. A government-formed committee has recommended these major changes and is also recommending a minimum four-year contract for residences and as long as seven years on commercial premises. Both the rent cap and the tenancy period clause are expected to be enacted soon. Imposing minimum tenancy restrictions will keep rental property owners from being able to evict tenants in favor of higher rent. This will also make it easier for lower class citizens to budget over the long term.
Inflation in the country has risen to record levels over the last seven months. December saw inflation up to 8.29% due to rising rent and food prices. Rent rose by 11% to $36 billion despite a rate increase in November. In addition to the rent cap, the government is expected to give land to private developers with the goal of developing affordable residential property. This apparently is as far as the government is willing to go at this time, so far unwilling to intervene directly.
Rent isn't the only cost that is getting capped. Oman is looking to put caps or ceilings on at least nine basic food items. The cost of rice, wheat flour, sugar, lentils, oil, tea, milk powder, evaporated milk powder and ghee has been rising, causing rapid inflation. Since these are considered staples in the country, it is believed that a limit on these items will benefit lower middle class families, making it easier for them to consistently pay their rent. The record levels of inflation experienced in Oman and other GCC states is forcing many of the Gulf countries to mirror US monetary policies when during periods of Federal rate cuts.
