Real estate market offers reprieve as rents go down

Muscat: The Sultanate is generally not counted among the expensive countries to live in. The reasons for these include the low population density and subsidized utility and fuel bills.

But that has changed over the past few years with fuel subsidies phased out from 2016 and those on water and electricity from this year.

On the other side, with a surplus of vacant apartments, the country has seen a deflation on the real estate front, especially the rental market. Flats that were rented out for RO300 are now available for RO180-200. The apartments rented out for RO350-RO400 are now available for RO240-RO250.

While the real estate has been offering a reprieve to both Omanis and expatriates, especially those with families here, the cost of living has been going up in areas such as water and electricity, vehicle insurance, fuel, and groceries.

Speaking to the Observer, a senior official of an FMCG (Fast Moving Consumer Goods) company told that goods transportation costs have increased multifold in recent times. “The diesel now costs around 240 baizas against RO110 baizas a decade ago. Wages of the staff, especially truck drivers, have also gone up substantially and not to forget the electricity costs from warehouses, the Value Added Tax (VAT) and visa fees among others. Retailers also face the same cost-factor, which will be ultimately transferred to the consumer.”

Crude prices currently touch 83 dollars a barrel and are expected to cross $90 per barrel in the coming days or even $100 a barrel by the year-end.

“I am a retired employee with not a very large family. A large part of my pension is consumed by groceries, utility, and fuel bills. Of course, I am healthy, and treatment is free in government hospitals,” said Khalid, a retired government employee.

“The government should have a ceiling on fuel prices for some time even if it is not possible to return to the previous rate of 120 baizas per liter. For a quick post-Covid recovery, it is important to increase the purchasing power of the consumers. People do not have enough money to spend after paying for bills, which is not good for anyone,” said Tariq Adawi, a private sector bachelor employee who is also burdened with a housing loan.

According to NCSI estimates, transportation costs have gone up by nearly 3.2 percent from the last year.

Expatriates in Oman have their fair share of worries even though house rents have come down. “My company manages an international fast-food chain, luxury goods among others. The cash flow was seriously affected due to Covid-19 restrictions during lockdowns. Our expenses are going up, except for the rent,” said Remesh Singh While they are happy with the scaling down of Covid-19 fears, both expatriates and citizens have a reason to worry – the rising costs.