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MUSCAT
— A real estate boom is set to emerge in Muscat
as the economy is increasingly considered as an
attractive investment destination for regional
and foreign investors. Oman doesn’t support unwarranted speculation. Nevertheless, real estate development plans, in the government and private sectors, according to official sources, are being pursued actively. Citizens from neighbouring countries, especially from the UAE, Saudi Arabia, Jordan, Lebanon, Egypt, Qatar and Kuwait are keen to invest in Oman’s real estate sector.
The prices of certain new properties — completed and under construction — are quoted at 25-30 per cent premium.
“As long as the authorities ensure a healthy appreciation of real estate prices, Oman will remain as an ideal real estate investment destination. Nevertheless, potential buyers, businessmen or salaried-class should not expect real estate prices to reach an incredulous dimension. Undoubtedly, real estate will witness a reasonable increase in prices,” a real estate investment consultant from Dubai told the Times of Oman. Businessmen from Pakistan and India are also keen to buy properties in Oman.
The salaried-class, especially the high-income and middle-class groups prefer buying small and medium-size villas and flats. Buyers, sources said, prefer investing in properties, preferably in and around the capital area rather than buying properties in the interior.
They also prefer buying new properties rather than buying 15-20-year-old properties regardless of the location.
Most buyers judge that the Muscat region will remain as one of the key contributors to the nation’s construction and economic vitality. “A boom in Oman’s construction, in one form or the other, is already there. It is evident from the recent upsurge in the number of expatriate workers in the construction sector.
The number of expatriates working in Oman’s construction sector climbed 20 per cent to nearly 145,000 in the first nine months of the current year ended September 30, 2006. Foreign labour is a vital component of the construction sector. More precisely, the construction sector created nearly 25,000 fresh jobs for expatriates in nine months since December 2005,” official sources said. Consumer spending has recorded its biggest increase in December 2006 on Christmas, Eid and New Year holidays.
Inflation is on the rise, and the prevailing relatively moderate inflation of more than three per cent sets enough room for further growth in economic activity. Technically, the total number of Omanis and expatriates working in the private sector has witnessed almost similar growth in 2006.
The number of Omanis and expatriates working in the private sector grew by 12.2 per cent and 13.6 per cent, respectively, in the first nine months of 2006 to about 110,600 and 482,700, respectively.
More importantly, Oman’s private sector created nearly 58,000 fresh jobs for expatriates and more than 12,000 jobs for nationals during the first nine months of 2006.
“The increase in jobs for expatriates has resulted in an increased real estate and economic activity, and in the capital area, no flats are available. If available or so, landlords are demanding unreasonable rates. Expatriate consumer confidence has increased to an all-time high during the last quarter of 2006, which was reflected in their overall spending.
“The year also witnessed a significant increase in number of expatriate bank accounts in Oman, spending for cars and electronic goods, number of credit cards and other goods and services. Those expatriates living with their families spend a large portion of their salaries here, fuelling the nation’s economic activity. Those who live alone spend a lot on telephone calls, food, travel and entertainment,” a businessman opined.
The government is already allowing foreign nationals to buy properties in selected areas. Leading banks are offering housing loans to both nationals and expatriates at attractive rates. For a foreigner, buying real estate in Oman is more or less like an investment in fixed assets, in a calm and emerging world-class Middle East city rather than buying property in a foreign country. “The Muscat real estate sector is on the road to international fame. Indeed, projects such as Blue City and The Wave will create goodwill for Oman’s property market. Buyers, however, should not expect an unwarranted boom in Oman’s real estate sector, but of course, a reasonable boom is in sight,” a consultant told Times.
A little push by the authorities, according to industry captains, will create wonders in Oman’s real estate and tourism sectors. No doubt, concrete plans to build hotels and corporate offices is set to fuel the construction industry, in terms of activity, cement production, fuel demand, employment opportunities, infrastructure, international goodwill. Many international businesses here are exploring the scope of constructing own offices, and a few have already started constructing their own office buildings.
Further, a number of Omani towns are on the threshold of a tourism and real estate boom, positioning themselves as one of the best tourist and business destinations in the region. A little more foreign investor-friendly policies, analysts think, can transform the potential of tourism into a very profitable reality in Oman. Despite concerns over the health of the regional economy have been mounting in recent months amid geopolitical tensions, a 15 per cent increase in the salaries of government employees and increased consumer spending will give a big boost to the domestic real estate market.