The fall in rents has created a lot of buzz in the real estate market with tenants taking advantage of the situation, going for better options. “The rents have gone down between 15 and 20 per cent in many areas. This has given people an opportunity to negotiate with their landlords or look for other options as new buildings keep coming up,” Salman Jalil, head of property division at Al Balushi Investments, told Muscat Daily .
He said that the market is now 100 per cent in favour of tenants and buyers. “Tenants are getting fair deal for new properties forcing old buildings to remain vacant. There are many options available now and this has affected the real estate market in general. We do not foresee any quick recovery,” Jalil said.
Jagruti Naravani, sales and business development manager, ERA Al Osool Real Estate, too agreed with this new trend. “We have seen 20 to 30 per cent decline in rents last year as compared to 2016. The increase in the number of new buildings that have come up is the cause and that is pushing the rents down. The demand has picked up in September because everyone is back after their summer holidays but the rents are still down.”
Many tenants Muscat Daily spoke to said that the supply has been much more than the demand, giving them the leverage to negotiate better rents even in prime areas. Anwar Abdullah had earlier rented an apartment for RO250 in an old building in Ruwi. Now, he is happy to rent another apartment of similar size in a new building for much less. “The building management refused to renegotiate the rent. So, I decided to move on. This year I got a similar-sized apartment in Amerat for just RO150.”
Christopher Steel, managing partner at Savills Oman, said the real estate sector is struggling to recover. “The recovery of the real estate sector has been longer that expected. We do not see any significant improvement in the next few years. Overall, the market has been the same this year as 2017 with less demand.”