Muscat: Real estate transactions dropped sharply in the past year, a housing ministry report has revealed.
Real estate transactions worth OMR2.6 billion were recorded in 2017, which was a drop of 61 per cent, compared to transactions in 2016. Realtors have put this down to the fact that buyers continue to wait and watch.
Sudhakar Reddy, general manager of Al Habib, said buyers are still waiting for land prices to stabilise, which has led to this slowdown. “Buyers are still in a wait-and-watch mode. They’re still waiting for land prices to stabilise. Right now, prices are a little volatile.
“Of course, this was expected after the oil price crash of 2014, but one needs to remember that up until mid- 2015, land prices were relatively stable. Now, land prices are continuing to rise. Once the prices become stable, we can expect buyers to commit themselves in a much bigger way,” he added.
Reddy noted that while the number of expats has risen, they are mostly blue collar workers, which has contributed to the dip in real estate transactions. “The number of expats is up, but on close observation you’ll notice that the number of white collar expats has dropped.
However, on the upside, we see greater Omanisation in the white collar sector, which may yet contribute to more real estate transactions,” he pointed out.
As many as 228,085 title deeds were issued in 2017, which was a decrease of six per cent from 2016. Also, the number of sales contracts totalled 59,495, with a cash value of more than OMR1.14 billion, which was a decrease of 13 per cent compared to 2016, while fees collected from sales contracts totalled more than OMR45 million. As many as 18,613 mortgage contracts were issued in 2017, worth OMR1.448 billion. The fees collected came to more than OMR8 million, a decrease of 18 per cent, compared to the revenue generated by mortgage contracts in 2016.Silver lining
It was not all doom and gloom, as there were some positive indicators for the real estate market, though they accounted for little in the larger picture. For instance, fees collected from real estate transactions rose to more than OMR80 million, registering an increase of 22 per cent. In 2016, OMR65 million was collected in fees. Moreover, first time land registrations saw a marginal increase of six per cent, with as many as 58,433 plots of land being registered in 2017, compared to 54,905 plots in 2016.
The number of properties issued to residents from other Gulf Cooperation Council (GCC) countries also witnessed a small increase.
In 2017, 1,200 properties were registered by non-Omani GCC nationals, while in 2016 the number was 1,917.
Al Habib’s Reddy pointed out that a projected three per cent growth for the economy of the Sultanate in 2018 may translate to more real estate transactions.Muscat tops
The Governorate of Muscat accounted for 70,903 real estate transactions, the highest in any province in 2017. This was followed by North Batinah and South Batinah, with 66,769 and 56,419 transactions, respectively.