Monday, August 22, 2016

So here we are, schools about to start up again and the usual end-of-school year exodus happened over the summer, but it appears that a number of us expats (sorry for those of you reading this blog who are Omani)(!) have not returned, or been replaced, yet. This coupled with the never-ending number of twin-villas and high-density apartment buildings that have been popping up all over the city has led to what I assume is an over-supply in the housing market at the moment.

Yet it seems that landlords (or estate agents) are still asking for the traditional rents found in each area. My advice to you if you are looking for a new place to live here in Muscat is to discount heavily (more than the traditional 100-150 rials a month) your offers for a place. I'm told that one can get a 5 bedroom villa in North Ghubra at the moment for as little as 750 rials, yet they're still be advertised for 1000-1200 rials - a bird in the hand is worth more than 3 in the bush it seems. Not only are the rents really coming down, but the payment terms are being revised as well. Gone it seems are the traditional 12 month rent payments, the "norm" these days appears to be at the very minimum 6 month payments, with 3 month payments being more and more popular. I even have a few friends who are renting apartments on a monthly basis.

Times have changed, and it seems, that at least some landlords, acknowledge this. I'm hoping to renegotiate my rent soon too, wish me luck!

But what about the bigger issue behind this housing over-supply? Yes it could be argued that the over supply is due to a significant increase in the supply of housing (eg new places being built) but also, the demand appears to have dropped too. For me, in my personal social network, I've seen an awful lot of friends leave in the last 6 months, with more on their way out every month too.

Now, I wonder how many of my friends that are leaving are being replaced by people who will command the same salaries that they had? I wonder what the knock on effect that will have on luxury spending in the retail sector - how many specialist cake shops (for example) will continue to remain open in the coming months?

Have you renegotiated your rent with your landlord? Scored a good deal? Have many of your friends left town too?

Hard times ahead I think, but we already knew that didn't we?!

More soon!

le fin.


Anonymous said...

People are still in denial here about the economy, and rents are a good indicator that for now the good times are over. Example, I was trying to explain to a taxi driver on the way back from the airport that him charging a minimum of 6 OMR to go from the airport to the golden tulip is ridiculous as it is the equivelant of a tank of petrol for his car and that if Oman hopes for increased tourism then things like that matter. This falls on deaf ears. I also stayed in the al bustan at the weekend, very nice hotel and fantastic location but really disappointed with the fact that only one restaurant was open, as were the couple from Germany whose complaint was that none of this was not mentioned anywhere on the advertisement for the holiday. When I mentioned this to the manager his answer was that were out of season and we cant run three restaurants? (they wont open the other two until November?? But when I asked him why he was miss advertising by not telling people he just didn't answer? The problem is that the al bustan is too far from any other eating place so tourists coming for a week have one restaurant for the whole period, pretty poor really. This should be sorted by the ministry of tourism.

Anonymous said...

Sorry I meant to comment further on rents. It seems that most landlords are still happy to leave a place empty rather for Months rather than reduce rents? Barking mad if you consider the following maths over a rental period of 1 year, and this is assuming they fill it after 6 months at top price.

Rental asked 1200
Months empty 6
Money lost 7,200
Total income for the year 7.200

Rental asked 1000
Months empty Nil
Money lost 200 per month over a year from difference in price drop, 2,400
Total income for the year 12,000

So there seems to be no common sense amongst some landlords. The change in rental payments is a long tome coming, I don't know many countries in the World where you pay rent 12 Months in advance???

Anonymous said...

Yes 150 off my current rent without even trying - one phone call just before the 3 month notice period "I'm paying way over the odds here - I need to know what next years rent is as I am seeing a lot of nice places on the market for less money" and 10 minutes later they called back with that offer. To be honest if they had not done that I would have been off but I am happy to stay as the place is well run and there are never any issues.

Anonymous said...

When you see properties not only for rent, but for sale, in The Wave then you know shit is going down!

Either prices need to go down or quality needs to go up because at the moment renters are getting a bum deal.

Anonymous said...

I have never paid anything other than monthly, even 6 years ago when I arrived it wasn't that hard to negotiate - I think the 12 months in advance thing is long gone - certainly these days with thousands of expats leaving, PDO bringing people back on camp into new villas and flats and the huge increase in supply in recent years unless you get a super cheap deal just walk away if they start talking about even 4 cheques

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