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Tue 15 Sep 2015 12:17 PM

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Omani real estate sector still not hit by oil prices decline

Cluttons report says prices haven’t affected employment and salaries in the real estate industry.

Omani real estate sector still not hit by oil prices decline
(Getty Images)

Oman’s real estate sector has remained stable despite lower oil prices, experts have said.

A number of experts have confirmed that the impact of declining oil prices on the real estate sector in Oman has been insignificant so far and still remains to be seen.

Speaking to Times of Oman, Faisal Durrani, head of research at Cluttons, a property consultancy, said that the decline in oil prices still hadn’t affected employment and salaries in the real estate industry.

“We still have not seen any significant impact filtered through the real estate market. I think it is just the question of waiting and seeing how much longer this lasts and what impact, if any, it will have,” he said.

Durrani added that the first jobs to be cut last year had been those of workers employed by oil companies on a temporary basis, and that further consolidation in office space might be expected as crude oil prices lower further.

“Again, depending on how much longer lower oil prices persist, we might start to see more job cuts,” he said, adding that the similar situation existed in other cities including Dubai, Aberdeen, Lagos, London and Abu Dhabi.

Philip Paul, head of Cluttons Oman, said that a slight hesitation existed in the local commercial market only for a short period of time.

There is stable demand for Grade A office space as well as good quality residential properties and the retail market has also transformed with the development of shopping malls, he said.

“In the residential sector, there is shortage of good stock across the market so we are not seeing a slowdown. The expatriate market as well as the Omani population is growing so I see continuing demand for apartments,” he said.

Paul said that there was also good demand for Grade A office space and good land plots.

Grade A space remains limited and a few Grade A buildings in Muscat are currently operating at over 80 per cent occupancy on average, he explained. “With the projects that are coming, I do not anticipate an oversupply.”

However, good plots are in short supply in right locations so they would retain their value, he added.

He identified a great potential in the real estate market in the following areas – the port city of Sohar because of the railway project and the transfer of commercial shipping activities from Port Sultan Qaboos to Sohar Port and Freezone, and in Duqm and Salalah.

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