Residential rental prices in Muscat are not expected to decline in 2013 as the increasing demand for quality housing continues to outstrip supply, according to real-estate experts.
As new jobs are created and the expatriate population increases steadily, the market is experiencing an undersupply of good-quality, affordable housing units which will continue to pressure rental values.
Chris Steel, managing partner of Savills Oman, said that there is a continuing supply of residential accommodation in the city, which, however, cannot be guaranteed to be of the right type and the right price.
“Since the demand is so high with a growing expatriate population and new jobs being created by the government, we do not expect to see rental values softening in 2013. There will continue to be an undersupply of affordable housing, which will maintain the pressure on rental prices,” Steel added.
Philip Paul, head of country, Cluttons Oman, said that with the acute shortage of medium-valued good-quality housing in the city, easy availability of housing loans will only provide a short-term solution for the local population to buy property.
“There are a number of new projects that are coming up but the standard does not always meet the expectations of buyers. Developers need to be quite careful in dissecting and differentiating between the abundant supply that is coming through which is not always what people are looking for.”
The government plans to create 56,000 new jobs for Omanis this year, along with new infrastructure and development programmes, as discussed in the budget for 2013. It will also provide cash liquidity, under the housing assistances programme, for building 4,000 houses at a total cost of RO80mn, in addition to the construction of 250 houses in the wilayat of al Mazyonah at a cost of RO8mn and issuing 1,390 housing loans worth RO28mn under the framework of the housing loans programme.
“From the announcement of new homes to delivery, it will take some time for the government - may be until 2014 - to complete the projects. But we will continue to see a steady rise in the demand for projects coming through,” Paul added.