Oman Rentals in Free-fall Amid Expats Exodus
Residential and commercial rents in the Sultanate continued to fall due to a combination of factors including the impact from COVID-19 pandemic, drop in expat population and low oil prices. “Expatriates play a significant role in influencing demand for real estate. Market conditions in both the residential and office space rental sectors in Muscat were already in slowdown or recession prior to the COVID-19 pandemic as a result of slow economic growth and negligible net population growth,”Ihsan Kharouf, Head of Savills Oman, said. In a report published by the property advisor, it said that the ongoing pandemic has further deteriorated the economic landscape. While the long term impact of the pandemic on the sector is currently unclear, it is evident that there will be increasing challenges over the coming months. The impacts of COVID-19 have exacerbated the flaws in what was an already weak market. The projected drop in the number of expatriates in Muscat over the coming months will place the residential market under increased downward pressure in terms of both reduced demand and achievable rental value. However, the agency said that better quality residential units are likely to show a more resilient performance. Current evidence suggests that a net exodus of highly qualified expatriates started in 2016 due to increasing restrictions on expatriate employment. The number of highly qualified expatriates dropped by 17.6 per cent between 2016 and the first quarter of 2020, while the total number of expatriate employees dropped by 6.8 per cent during the same period.
Tags : INTERNATIONAL