Non-resident Indians in the UAE are helping to support an uptick in Muscat’s property sector as they look for cheaper buying options than those offered by Dubai’s market.
The property consultancy Cluttons cited NRIs and Omanis looking to gain a foothold on the property ladder as drivers behind growing demand in Muscat’s residential market.
“We have recorded an upturn in the number of non-resident Indian buyers from the United Arab Emirates entering the market over the past six months,” said Steve Morgan, the chief executive of Cluttons Middle East. “With prices rebounding in Dubai, an affordability threshold may have been breached and with regulations surrounding retirement properties not entirely clear, it would [make] logical sense for this group to look at nearby markets such as Muscat.
“While this trend is yet to remove substantive quantities of stock from the market, the propensity for the creation of several “buy-to-leave” homes, as the limited supply is further depleted, will no doubt place further upward pressure on capital values.”
Strong economic output and rising levels of job creation are underpinning a rebound in property markets across the GCC. The sharpest acceleration in values has been in Dubai, where rents grew about 30 per cent on average in the first quarter of the year. Indians have traditionally been the largest foreign buyers in Dubai, with their investment reaching nearly Dh6 billion in that period, according to Dubai Land Department data.
After several years in the doldrums following the global financial crisis, Muscat’s property market is also picking up. Interest in the city from NRI buyers is not only generated by its relative affordability compared to Dubai, but also because it offers a residential visa linked to property ownership. Dubai offers no such measure.
In its spring outlook report, Cluttons said valuations in Muscat were also gathering momentum after two years of relative stability in rents. Monthly rents for four-bedroom villas in the Azaiba area had risen by 9 per cent, followed by 6.3 per cent in Muscat Hills and by 3 per cent in the Wave and Shati Al Qurum. Rents for two-bedroom apartments had remained largely stable, it noted.
A trend of residents upgrading to larger or higher-quality property was encouraging landlords to push up rents, it said. The focus on higher-end schemes was expected to lead to a widening gap between primary and secondary locations throughout the city in the near term.
More Omani nationals are also looking to invest in Muscat’s property market. Omanis still account for the vast majority of cash-based deals as well as most of the larger home purchases, according to the report.
“This year is a good year for real estate as people are looking to buy more flats and more villas, some of them are first-time buyers,” said Ali Ibrahim, the sales manager at Al Mamorah Real Estate Investment, a property agent in Muscat.
Omanis continue to be the most active buyers in off-plan sales such as Muscat Hills II, where prices average 1,000 Omani riyals (Dh9,513) per square metre.
tarnold@thenational.ae
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