Muscat - Buoyed by higher oil prices, Oman’s economy is recovering well from the lows of 2016 and is projected to grow by 3.6 per cent in 2018, according to the international real estate consultancy Cluttons. If sustained in the longer term, this economic growth is expected to have positive impacts across the property market, Cluttons said in a report released on Sunday.

 

Cluttons’ Muscat Spring 2018 Property Market Outlook report indicated the government’s strong push to boost overall economic growth has resulted in a number of very encouraging developments for the property market, such as the much-anticipated decision to allow the creation of a real estate investment fund (REIF). This will pave the way for investments in large-scale real estate projects at significantly lower price points and with far greater liquidity, in comparison to more traditional real estate investment, according to the report.

Faisal Durrani, head of research at Cluttons, said, “The increased ability of institutions and individuals to invest in income-generating real estate assets has the potential to provide a significant boost to the real estate sector in Oman, particularly since the regulations require that at least 75 per cent of REIF’s assets must be invested in Oman.”

Cluttons report highlighted that rental rates in Muscat appear to have stabilised, with a marginal 1.1 per cent decline in average rates in the first three months of this year. The largest drops in rental values during the first quarter were seen in Azaiba, North Ghubrah, Muscat Hills and Madinat as Sultan Qaboos, while Bausher, Shatti al Qurum and Qurm registered a rise.

Cluttons expects demand, in the short to medium term, to be impacted by the Ministry of Manpower’s decision to temporarily ban the issuance of work permits in key sectors. “However, if we continue to see gains in oil prices, the economy will continue to be driven upwards, ultimately boosting the residential market, particularly in terms of demand,” Matthew Wright, head of consultancy and industrial at Cluttons Oman, said.

According to the report, office rents remains flat, with average headline rents holding steady in the city’s key submarkets during the first quarter of 2018.

“Even in a market that has faced uncertainties and setbacks in the form of a demand slump following the shock oil price rout four years ago, there are still occupiers who are drawn to high quality buildings and are committed to upgrading space,” Wright said.

Source:http://www.muscatdaily.com/Archive/Oman/Economic-recovery-to-have-positive-impact-on-Oman-s-real-estate-market-58v2#ixzz5Eu6nwkGO