The government’s decision to amend the minimum wage limit for family visa to RO 300 has received mixed response from real estate experts.
While many opine the new move will fuel a rise in rental values as more expatriates can now bring their families to Oman, others argue the real estate will continue to be under pressure.
“The oil price malaise has had a negative impact on the economy with its resultant effect on job market. The decision came at a time when many expatriates are sending back their families,” said Mubarak al Wahaibi, a leading contracting company owner in Ruwi.
Supply has outstripped demand. Hundreds of new flats and villas of all types are available in the market.
Now, there are fewer people willing to rent or buy properties, he told the Observer.
But this was contradicted by Abdullah al Balushi, a property broker. “Demand will pick up in the coming months as more expatriates who do not fall in the RO 600 salary bracket and who have been earning more than this by way of allowances and commissions, will bring their families.”
According to him, there has been a steady rise in the number of expatriates in the Sultanate.
Oman has amended the minimum wage limit of RO 600 and reduced it to RO 300 for expatriates wishing to get family visa.
Data from the National Centre for Statistics and Information indicated the expat population rose by more than 12 per cent per annum during the period 2004-2016. By July 2017, there were 2.07 million expats in Oman.
“How many of them can afford to maintain their families as a majority of them are blue collar workers with minimum wages. It is metaphorical to say more families will arrive with the new decision,” said Abdul Khader, a civil contractor.
Reports from different money exchange houses show there has been significant fall in expatriate remittances. “This is indicative of the money crunch biting the expatriate community. So how is it possible to expect more expatriates bringing their families lifting demand for more flats,” asks an official at a money exchange in Ruwi. Meanwhile, the real estate sector continues to be under pressure, showing deterioration in tenant requirement levels in the last few years. According to Cluttons, tenants are paying less in rents for residential properties. The agency predicts that overall residential rents in Muscat will fall further by 5 per cent to 7 per cent in the current year.