It says that there has been a significant increase in apartment supply across Muscat but also a steady demand in established locations. It is predicting an on going softening of rental values.
However, it adds that good quality apartment buildings in the central areas will hold or even increase their value due to strong demand and the limited opportunities for further development in these locations.
The real estate specialist is currently celebrating its 25th year of operation in the Sultanate and believes that although economic development remains heavily dependent on the oil and gas sector, there is evidence that the non oil sector of the economy is also showing good growth.
It points out tourism in Oman should receive a significant boost from the Sultanate being named one of National Geographic’s top 20 destinations. Furthermore, the capital, Muscat, has been chosen as the Capital for Arab Tourism for 2012 whilst also receiving an international accolade by the Lonely Planet as the second best city in the world to visit.
In addition, a recent Government decision has also reduced the cost of a short term tourist visa by 75% from RO20 to RO5, further promoting and supporting Oman’s commitment to boost the Sultanate’s tourism sector into long term growth.
Cluttons notes that demand for residential apartments remains good, particularly for the established central areas of Qurum, Shatti Al Qurum and Madinat Qaboos. The coastal suburbs of Ghubrah North and Azaiba have become increasingly attractive through significant development over the years.
Properties at The Wave and Muscat Hills remain in demand due to their quality, setting and facilities, despite their separation from the central area.
Whilst location is still a discerning factor in the rental market, Cluttons indicates that tenants are looking for well designed, well built properties, paying attention to features such as good quality fixtures and fittings, outdoor space, leisure facilities and excellent maintenance. Cluttons notes that tenants are increasingly willing to compromise on the size and even location of a property rather than on its quality.
According to Cluttons, two clear trends that have taken shape over recent years have been a marked increase in demand for both one bedroom and fully furnished apartments. Cluttons identifies, however, that around 75% of demand is for two and three bedroom apartments.
Overall, Cluttons reveals that rental values for residential apartments have stabilised to a large degree after significant falls from the height of the market in 2008 but that the general trend is for an on going softening of rental values as the supply of residential apartments continues to increase.
