The Sultanate of Oman received yet another feather in its cap with the capital city, Muscat, topping the list of the most affordable capital cities when comparing property price to income, according to report by Netcredit — an American online lender.
Netcredit’s study analysed more than 800,000 property listings in 73 capital cities around the world and calculated the median house price for each city in total and in per square metre (sqm).
The report was supplemented with property studies conducted within the last 12 months from local real estate companies in each country. Netcredit then calculated the average net salary for each capital and used that figure to calculate affordability and the number of years an average earner would need to buy a median-value home.
The report found that it would only take 4.7 yearly salaries to afford the median house price in Muscat — a title it shared with Pretoria in South Africa. The median price of homes in Muscat costs $108,875.
“Times are strange on the property market — and on a global scale. Covid-19 radically shook up our idea of where and how we wanted to live, and it also radically altered many peoples’ options for doing so. On balance, prices rose; but now, in the fallout of the pandemic and with the added complication of the energy crisis and war in Ukraine, they’re on their way down.
Higher interest rates and the cost of living have forced down demand for houses, although a general shortage of houses on the market has kept prices from bombing. Meanwhile, wages are falling in real terms (with a particular impact on lower-income workers), further inhibiting potential buyers from spending,” Netcredit said.
“According to Oxford Economics, nearly all 38 OECD countries are likely to see a slowdown in house price growth, with prices actually falling in more than half of them. This would be the widest deceleration in housing price growth for over 22 years. And according to the IMF, real house prices could drop by 25 per cent in emerging markets over the next three years and by 10 per cent in advanced markets (although this is a worst-case view),” it added.
After Muscat and Pretoria, Belfast in Northern Ireland comes next with 6.9 yearly salaries to afford median home price. Completing the top ten list include Bucharest (6.9), Bandar Seri Begawan (8.7), Nicosia (9.5), Washington DC (9.6), Warsaw (9.9), Windhoek (10.2) and Kuala Lumpur (10.5).
In terms of price per square metre, Muscat ranks 7th cheapest in the world with $751 per square metre — behind Havana ($234), Ankara ($432), Tripoli ($500), Pretoria ($568), Dhaka ($672), and Managua ($732). Completing the least expensive cities in the world are Islamabad ($752), Cairo ($802) and Ulaanbaatar ($829).
Havana in Cuba may have the lowest average house price, but it would take 91.4 yearly salaries to afford the median house price.
The top five in terms of median house price include Monaco ($4,475,000) Luxembourg ($1,416,610), Singapore ($1,342,848), Seoul ($921,600) and Bern ($773,896). In terms of price per square metre, Monaco also topped the list with $52,000 per square metre followed by Singapore ($15,009), Seoul ($11,244), Luxembourg ($10,897) and Paris ($10,880).