cluttons.

com

muscat, Spring 2014

cluttons.com

Residential Market Outlook

Ehenda nem nist, tempost eic te et ipiet eum aut asimusci quam quis
etur? Mod et por aspe soloruptis eos experis dolliciae cus, si debis doles
entorepudi sunt fugia sectibus dit experciendi dolupta sinctotatiis
corpossecat illuptaquae. Sincipit molorro mos et istia dis sunto estotaeriae.
two years, many households are capitalising on the relative stability
Rores
nonetstart
aut quaepratqui
Villa rents
to climb consequid et aut volecto rehene il id quunti
the market and upgrading where possible. In response to this, we
cusa
im quameapartments
con repudi and
dolorate
dollest et villas
autataremain
ad ullector
Two-bedroom
four-bedroom
highlyminumofet,
are starting to see landlords gradually adjust rents upwards.
quia
consect
aquiatiMuscat.
onsequam.
sought
after across
Strong demand for larger villas in
particular, coupled with limited new supply, has helped to drive
In general, we expect rents to continue rising this year, particularly
up rents during Q1 2014. Monthly rents for four-bedroom villas
as tenant demand continues to grow on the back of job creation,
have risen across most submarkets, with Azaiba (9%) showing the
which is in part linked to the heavy government investment in
strongest growth this quarter. This was closely followed by Muscat
transportation and energy infrastructure. The focus on higher end
Hills (6.3%), The Wave (3%) and Shati Al Qurum (3%).
schemes is expected to lead to a widening gap between prime
and secondary locations throughout the city in the near term.
Rents for two bedroom apartments on the other hand have
remained largely stable. At The Wave however, monthly rents in this
category crept up to OMR 850, from OMR 800 during Q4 last year.
Performance of rental values four bedroom villas

apartment at The Wave (OMR)

Source:
T:
020Cluttons
7647 7033
F: 020 7647 7033
cluttons.com

2,000
1,500
1,000
500

Shatti Al Qurum
Source: Cluttons

2013

2012

Azaiba

The Wave

Q1 2014

Monthly rent for a four-bedroom villa

at The Wave (OMR)

2011

0
2010

850 1700

Cluttons LLP
2 Portman Street
Portman House
Monthly rent
for a6DU
two-bedroom
London
W1H

2,500

OMR per month

Luxury schemes attracting the most attention

The Wave and Muscat Hills are currently enjoying resurgence in
demand as tenants hone in on schemes perceived to offer better
quality accommodation. As rents have largely held steady for over

Muscat Hills

Cluttons
Muscat Residential Market Outlook Spring 2014

This will no doubt drive landlords in more secondary areas to

implement renovation programmes as they work to maximise
their returns.
Away from villa developments, apartment schemes with high
quality finishing and amenities such as air conditioning and 24hour security continue to be favoured by tenants. The 423-unit
Saud Bahwan Plaza in Ghubrah, for instance, has a long waiting
list and is a development that is consistently requested by
tenants. Not only is the modern finishing attractive to tenants,
but crucially, the relative affordability of rents compared to similar
developments elsewhere in the city makes the Saud Bahwan Plaza
highly attractive. Two bedroom apartments at the scheme remain
in most demand and currently rent for between OMR 600 and
OMR 625 per month.

Performance of rental values two bedroom apartments

900

OMR per month

800
700
600
500

demand. This, coupled with favourable mortgage rates of circa

4.5% has helped to drive home purchases, with mortgaged buyers
accounting for about 80% of the market. Omani nationals still
account for the vast majority of cash-based deals and account for
most of the larger home purchases.

The recent improvement in overall

economic conditions has translated
into an increasing number of developers
bringing new schemes to the market
On the supply front, we feel the market has room to absorb
further residential schemes and prices are, to a large extent,
currently being supported by the dearth of stock. With no
substantive new ITC schemes likely to be delivered over the next
six months, we expect capital values to continue edging upwards
over the course of the year.

400
300
200
100

Shatti Al Qurum

Al Khuwair

The Wave

Q1 2014

2013

2012

2011

2010

Muscat Hills

Source: Cluttons

Sales market remains buoyant

Omani nationals continue to be the most active buyers in
Integrated Tourism Complexes (ITCs), with Muscat Hills II, where
prices average OMR 1,000 psm, being amongst the most preferred
recent launches. The pent up demand from Omani nationals
is driven by a gradual build up of home ownership aspirations
throughout the great recession. Many buyers put purchases on
hold during the global economic crisis, however with confidence
returning to the market, many are opting to make the transition
to owner occupation.
The recent improvement in overall economic conditions has also
translated into an increasing number of developers bringing new
schemes to the market in order to satisfy the growing buyer

Non-resident-Indian buyers lured by retirement prospects

We have recorded an upturn in the number of non-resident-Indian
(NRI) buyers from the UAE entering the market over the past six
months. While prices in Dubai continue to rebound, not only may
an affordability threshold have been breached, but the grey area
surrounding ownership of retirement homes also comes with a
slew of regulations that often deters some buyers.
Oman has a long and close history with the Indian subcontinent
and it comes as no surprise that this cohort feels a strong
affinity with places such as Muscat. In addition, there is the
added benefit of a residential visa linked to property ownership;
something Dubai does not currently offer. We have found this
to be an increasingly attractive draw for Dubai-based NRIs who
are swooping into the market with the sole intent of securing
retirement homes. Muscats relative proximity to Dubai and
excellent road and air-links have helped to heighten the appeal of
owning a home in Oman.
While this trend is yet to remove substantive quantities of stock
from the market, the propensity for the creation of several buyto-leave homes as the limited supply is further depleted will no
doubt place further upward pressure on capital values.

For further information, please contact

Marianne Helme
Steve Morgan
Residential Manager
Head of Middle East
marianne.helme@cluttons.com
steven.morgan@cluttons.com
+968 22057800
+9714 365 7700
Philip Paul
Head of Oman
philip.paul@cluttons.com
+968 2205 7900

Faisal Durrani
International Research & Business Development Manager
faisal.durrani@cluttons.com
+44 207 647 7166

Cluttons & Partners LLC 2014. This publication

is the sole property of Cluttons & Partners
LLC and must not be copied, reproduced or
transmitted in any form or by any means,
either in whole or in part, without the prior
written consent of Cluttons LLP. The information
contained in this publication has been obtained
from sources generally regarded to be reliable.
However, no representation is made or
warranty given, in repect of the accuracy of this
information. We would like to be informed of any
inaccuracies so that we may correct them.

cluttons.com

2014

( )

( )

2,000
1,500
1,000
500

2010

2011

2012

1700 850

2,500

2013

.
850 800
.

2014

.

.2014

( )9
( )6.3 ( )3 (.)3

.

.
.


2014

.

.
.


24 .
423




.
600 625 .

.
4.5
80
.

.

.


.

.



.


.

900
800
700

600
500
400
300
200
100
2011

2012

2013

2010

2014

2 1000
.

" "

.

.

.

.


.

"
"
.

:


steven.morgan@cluttons.com
+9714 365 7700

marianne.helme@cluttons.com
+968 22057800

philip.paul@cluttons.com
+968 2205 7900

faisal.durrani@cluttons.com
+44 207 647 7166

.. .2014
.

.. .

.
.
.