Landlords no longer enjoy the power to dictate terms on the rental landscape as the building supply outstrips demand in most parts of Muscat. Unlike in the past when tenants had to seek the help of brokers, now they can pick and choose an accommodation on their own at any locality, that too at a low price.
Pristine villas and furnished flats are aplenty in the city exhibiting ‘for rent’ boards.
The worst-hit are owners of buildings with a few flats.
“Two out of a total of four flats in my apartment are vacant. There are no takers even though I reduced the rent by more than 20 per cent,” said Saleh al Balushi in Ruwi.
He fears he may default on his bank loan — with which the building was constructed — if the situation continues.
The same sentiment was echoed by Suleiman al Maskari, who has a six-flat apartment at Darsait.
The rent from the ancestral property is shared by four brothers.
“I am not getting tenants even though I am ready to reduce the rent. Income from the rent is our livelihood.
I am concerned about the future of the rental market. The number of flats are increasing and rents are low,” he said.
Ahmed al Wahaibi, partner of a leading contracting company in Ruwi, said: “New residential and commercial properties are mushrooming across the city amid a drop in demand.”
According to him, the drop in rents is because of a big increase in the supply of properties in almost all parts of Muscat.
At the same time, he said there has been a demand for single bedroom or studio flats.
“Many expatriates are leaving their families back in their home countries either to cut expenditure or out of fear due to uncertainty in the job market. This has led to a demand for smaller housing units,” he said.
Al Wahaibi said the average monthly rent for properties has fallen from a low of 20 per cent to a high of 40 per cent depending on areas and facilities in the buildings.
He said, “There is still demand for ‘A’ grade residential properties. Tenants are focused on good quality accommodation with well-managed facilities and amenities.”
Landlords can take advantage by upgrading the facilities, he added.
According to a recent report from Cluttons, rents during the first three months of the current year witnessed a decline with some locations starting to show even bottoming out.
Faisal Durrani, head of research at Cluttons (property consulting firm), said in the Spring 2017 Property Market Outlook report, “We tracked 12 locations in Muscat, four of which have no change this quarter. However, people are still nervous about job security and tenants are still shopping around for what they perceive as the best deal for them.”
Across the board, rents are at fresh historic lows and are roughly 60 per cent down from the market peak of 2008, said the report.