MUSCAT: Apartment rents in Oman have dropped 10-15 per cent this year than they were a year ago, according to a report from real estate firm Al Habib & Co. It attributed the drop due to the falling number of expatriates in the Sultanate.

According to the National Centre for Statistics and Information (NCSI), the number of expat workers in the private sector slipped to 1745K as of July 31, 2019, down from 1787K at the end of 2018. Interestingly, the fall in white collar expat workers staying in rented apartments have also affected the real estate market. 

“The continuing decline in well-educated expatriate numbers is putting a lot of pressure on rents and occupancies in investment properties. In most cases, enquiries are not from newly arriving expatriates but from those already in Oman, seeking to move to cheaper or better accommodation,” said Al Habib & Co in its “Property Report” for October 2019.

The number of white collar expat workers who hold a diploma or higher qualification – those most likely to rent apartments – had declined 13.17 per cent, according to the report.  

Falling rents, more options 
According to the report, some of the expats are sending back their families and moving to a smaller or shared accommodation. However, the affordability of rental properties due to falling rents is giving residents more options and more time.

The drop-in prices have given residents a choice of properties with more bedrooms, better locations and improved facilities, which are now within their budget. “Owners, who have been quick to adjust the asking rents downwards, maintain the buildings in good condition and offer good maintenance services, are enjoying higher occupancies rather than those who are less flexible on rents and who do not maintain their buildings well,” the report pointed out.

“I was looking for a two bed-room accommodation in Wadi Kabir as my son is studying nearby and I had a wide range of options to look around that area within my budget,” said Noufal Rahim, a Muscat resident. 

When selling becomes difficult
Rents have declined in older areas like Ruwi and Wadi Kabir. “These areas have been badly affected as the majority of the expat occupants have left the country. So, the rent is really down. You have lot many options to choose from these days,” said a real-estate agent in Ruwi.

According to the Al Habib report, due to decline in rents, developers are also finding it difficult to sell villas in spite of operating on wafer thin margins. “Selling large plots has become difficult as de- velopers do not see much of an opportunity in developing large projects,” the report added.