MUSCAT: With a significant drop in the expatriate population in Oman, and the impacts of the Covid-19 pandemic, the country’s property market has come under pressure, according to a report from real estate consultancy Savills. 

“Expats constitute 40% of Oman’s population and play a significant role in the demand for residential units across the country,” the report said. The Oman Census 2020 reveals that there are currently 80,000 vacant residential units (around 20% of the total residential supply) in Muscat.  According to Savills, the drop in the number of expatriates in Muscat has seen a notable reduction of rents over the last 15 months.  

“While the Omani population has continued to grow steadily, expatriate numbers started to drop gradually in 2018 and 2019 before seeing a drop from 880,000 to 760,000 (almost 15 percent) over the course of 2020,” the report noted. 

In the report, Ihsan Kharouf, Head of Savills Oman highlighted the need for landlords to be flexible, pro-active and move quickly to changing market conditions in order to attract and retain tenants.  According to the Savills report, more affordable apartments and villas/townhouses are available in exclusive localities of Al Mouj, Muscat Hills and Shatti Al Qurum. 

The Savills research shows that average apartment rental values have dropped by a further 10 percent to 15 percent over the last 18 months. 

In Al Khuwair, an average rental value for a one bedroom apartment is OMR 200, while in Azaiba/Al Ghubrah, a two-bedroom apartment comes in the range of OMR 350. “A significant proportion of demand will remain from tenants looking to upgrade from their existing accommodation while paying the same rent,” the report said.

According to Savills, there is an increasing demand for shorter term leases, monthly payments, and furnished properties. “I have recently renewed my contract for just six months. The Covid-19 pandemic has created an environment of uncertainty, we still don’t know what will happen tomorrow,” said Rajesh Nair, who is residing in a two-bedroom apartment in Al Wadi Al Kabul. 

With Oman expecting to vaccinate over 70 percent of the population by the end of the year, real estate dealers are keeping fingers crossed. “The Sultanate has significantly accelerated its Covid-19 vaccination programme in June with the intention of over 70% of the population being vaccinated by the end of the year. This is likely to be of significant benefit in re-opening the travel and tourism sector while allowing current restrictions on the retail sector to be significantly eased,” the Savills report added.