Image used for illustrative purpose. Aerial view of Muscat, Oman traffic.
Muscat – Oversupply and weak demand for properties have caused a sharp decline in Oman’s real estate market this year.
The total value of traded properties fell 13.6 per cent to RO873.1mn in the first four months of 2019 as against RO1.011bn in the corresponding period of last year, data released by the National Centre for Statistics and Information (NCSI) showed.
The weakness in the real estate market has both reflected and contributed to weak economic growth in much of the GCC region, the Washington DC-based Institute of International Finance (IIF) said in a GCC real estate market report. ‘Oversupply and weak demand for real estate have caused a steady decline in prices since 2014’.
With a subdued overall demand, rents and prices in Oman’s residential property market are expected to decline further this year as the market continues to be oversupplied with apartment blocks, the real estate consultancy and chartered surveying firm Cavendish Maxwell said in a report.
Of the total value of traded properties in Oman, value of mortgage contracts fell more than 21 per cent to RO523.2mn during the January-April period of this year, compared with RO664.6mn in the same period last year. The number of mortgage contracts dropped 7.2 per cent to 5,339 from 5,753 a year ago.
The rents and prices are expected to fall further with addition of upcoming supply, as well as the impact of the ban on expatriate visas, according to Cavendish Maxwell.
According to the NCSI figures, the value of sales contracts remained almost flat at RO341.9mn this year as against RO340.9mn in the corresponding period of 2018. The number of sales contracts decreased 3 per cent to 20,868 in the first four months of 2019 from 21,504 in the same period of 2018.
‘The patterns of oversupply and falling prices are evident in both commercial and residential markets across the GCC region. Looking ahead, the price decline is likely to persist’, the IIF report said.
According to the NCSI statistics, the total number of properties issued during the January-April period of this year stood at 76,818, which is 7.1 per cent lower from 82,709 in the same period of last year. The number of properties issued for GCC citizens dropped more than 30 per cent to 380 against 546 in the same period of 2018.
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