No takers despite lower rents

Muscat: As fears in the job market and slowdown in businesses mount, small-time landlords say they are the worst hit either by way of vacant flats or reduced rent amount.

Already hit by supply-demand imbalance, their woes have been exacerbated by the coronavirus pandemic effects.

“Leave alone the fall in rents, there are no takers even for brand new flats at less than 50 percent of the renal value,” said Hamoud al Wahaibi, who owns a few flats in Ruwi.

The rental market, already flooded with new properties, is further hit by the en masse departure of expatriates as a result of the COVID-19 impact.

“This is equally as difficult time for landlords or property investors as it is for tenants. Still, some landlords are supporting those tenants who are financially affected due to the pandemic situation with reduced or delayed payments”, said Darwish Abubaker, manager for a contracting firm.

Unlike large real estate companies that own multiple rental buildings, the so-called ‘mom and pop’ landlords cannot afford to keep their flats empty as most of these buildings are mortgaged to banks against loans.

“Three out of a total of eight flats in my apartment are vacant as the tenants left for their home countries. Two of them have not returned. There are no takers even though I reduced the rent by more than 50 percent,” said Suleiman Maskari.

He fears he may default on his bank loan — with which the building was constructed — if the situation continues.

The Central Bank of Oman in April allowed a three-month moratorium on payment of installments of loans in view of the coronavirus outbreak.

The woes of Hameed al Hadhrami, who lives in Izki, are different from other landlords.

“The building that is rented out in Muscat is our ancestral property. The income from the building, which is our livelihood, is shared by four seven of us including our sisters. For the last four months tenants are not paying the full amount,” he said.

The worst-hit are landlords who own three to four-bedroom flats.

“Many expatriates families are shifting to small flats to cut expenses necessitated by reduced salaries or other reasons. Owners of high net worth buildings are finding difficulty in getting tenants,” said Rashid al Mubarak.