Oman's residential rents showing signs of stability
Residential rentals in the Sultanate did not change significantly in the third quarter of 2011, after several industry sources have put the average residential rental decline in Oman in the first half around 10-15 percent, according to a report by Global Investment House. The study further notes that apartment monthly rents ranged between RO330 and RO750 in the third quarter in line with second quarter and down from RO350 and RO800 in the first quarter, reflecting the lower demand for higher end properties versus affordable housing.
According to official data from the Central Bank of Oman, there was no change in inflation in the housing, electricity and water component of the CPI over the second quarter of 2011 versus a 14.8 percent decline over the third quarter in 2010. The office market in Oman continued to witness a declining trend as demand slowed following the pattern that started since 2008. Supply of grade A office space still lags behind that of lower grades and is renting at a significant premium that could reach up to 33 percent, the research note adds.
Shatti Al Qurum An additional 158,000 square metres of grade A space is currently in the pipeline and is expected to be delivered over the upcoming year. In the retail market, rents continued their downward slide across most major locations and size offerings with rental rates following an average 30-45 percent from their peak in 2008 and falling as much as 29 percent year-to-date in areas like Shatti Al Qurum.
A large share of the new supply that was planned to enter the market between 2011 and 2013 has been put on hold, which should control the rate of supply and contain vacancy rates going forward. Bahrain's office market performance showed further weakness in the third quarter of 2011, with average rental prices of grade A office space down 3 percent quarter-on-quarter and 13 percent year-on-year, says the report. The market still suffers from a state of oversupply with the offering of one to three months rent free now a common practice by landlords.
Further, asset prices and rents remained under pressure in the third quarter negatively affected by the political instability that hit the country in the first quarter, along with seasonal factors like the month of Ramadan and summer holidays. In Kuwait, the overall trading value decreased a significant 45 percent quarter-on-quarter on the back of slowing trade in the summer and the month of Ramadan. This, however, is correspondent to a 29 percent increase year-on-year, while the nine months of 2011 registered a momentous 50 percent increase over nine months in 2010, reflecting the growing investor confidence in the market. Land prices maintained their upward drift in the third quarter across all governorates in spite of the slowing trade activity, which is attributable to an overall slowdown in the business environment in the summer time rather than a sign of sluggishness in the general trend.
Qatar prices stabilise The residential market in Qatar continued to show signs of stabilisation in the third quarter for the second consecutive quarter after a similar performance in the previous quarter with rental prices still hovering around their first quarter of 2011 levels in most areas. Activity in the sales market is still muted due to the large disparity between buyer and seller quoted prices. As new projects are being delivered adding to the commercial stock, the amount of office space in the market remains abundant and is unmet by the slowing demand.
Average monthly rents in the third quarter remained unchanged after dropping 3 percent in the second quarter. The value of total real estate transactions in Riyadh (Saudi Arabia) went down 37 percent quarter-on-quarter registering 18.6 billion Saudi riyals, down from 29.6 billion Saudi riyals in the second quarter, while the number of transactions dropped to 43 percent to 14.3 million down from 25 million transactions in the previous quarter.
Dubai apartment rents decreased 2-3 percent on average in the third quarter following a 2 percent decline in the second quarter over the previous quarter while villa rents maintained their levels in line with the previous two quarters. Selling prices for Dubai apartments, however, lost another 3 percent led by Discovery Gardens. In Abu Dhabi, rents of both apartments and villas continued their declining pattern negatively affected by new deliveries during the quarter. The office market remains under pressure in both UAE markets on the back of relentless oversupply and feeble business demand.
In Dubai, office rents and selling prices dropped 3 percent in the previous quarter led by Tecom and Business Bay, which dropped 6 percent. in selling value and 9% in rental value with city-wide vacancy rates still averaging at 45%. In Abu Dhabi, office rents dropped 6% after losing 4% in 2Q11 with an estimated vacancy rate of 20%. Office space of grades B and C still, relatively, underperform as tenants upgrade to better office space at affordable prices..
- Shoura Council: Expats cannot buy property in Mecca, Medina, Riyadh
- Saudis, Jordanians top the list of Arab property buyers in Dubai
- Construction costs fall in Dubai
- Al Bustan Centre & Residence wraps up a successful participation in ATM 2015
- The reality of realty: inbound property investments in GCC 'far less' than outbound
- Dubai Q2 report, commercial and residential markets showing stability: Clutton Middle East
- Weak oil likely to hit Bahrain residential rents
- Residential rental rates in Qatar to witness upward revision in 2010
- Inflation could be affected unless Abu Dhabi rents stabilize
- Abu Dhabi property market shows signs of stability