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Over the past decade, the real estate sector in Oman has undergone considerable change. With the execution, completion and planned rollout of additional key infrastructure projects, the sultanate’s diversification efforts to move away from its reliance on a hydrocarbon-driven economy has been remarkable. These positive changes have steadily transformed the property market by connecting the capital to the country’s many upcoming development areas, free-trade zones and industrial hubs.
Most recent overviews will indicate that during this time there has been some degree of upgrade in the quality of stock in various sectors of the property market in Oman, particularly in Muscat. Higher quality developments with better, more extensive facilities and amenities are being offered in newer commercial, residential and retail spaces in upcoming projects across the city.
There is still potential for more development as the country delivers on committed plans for diversification in line with Vision 2030. As new developments progress from conception to completion, high standards of professional feasibility and ongoing valuation exercises will play an important role in managing investment risk. This is particularly important where mortgage finance and development funding interests are involved. Crucially, accurate and professional property valuations will serve to mitigate risk in the medium and long terms by ensuring real estate assets are assessed and accounted for correctly. In turn, these valuations will also enable proactive portfolio management strategies on existing portfolios to maximise future value.
As part of the development plans, a steady stream of new projects is expected to enter Oman’s real estate market over the next few years. This comes at a time when the sector is in a phase of adjustment and realignment as supply and demand in the commercial and residential sectors correct rental levels. This is likely to continue for the next three years, to 2022.
During this period, it is likely that landlords, tenants and investors in the country’s real estate sector will continue to tread carefully. Predictably, already slow transactional activity has been lower than in previous years, as investors hold onto their existing assets rather than testing value through sales and trading.
Going forward, confidence in the market must continue to be underpinned by professional standards, accurate real estate valuations and solid investment strategies. Professional insights and in-depth understanding of the local market can only improve the quality of investments, assets and the industry as a whole. The risk of inaccuracies and poor standards today could potentially lead to problems further down the line.
Oman’s real estate sector has grown markedly over the past two decades. Factors like the incorporation of industry best practices and sound valuation advice will heavily influence the success of the property market over the next 20 years, especially as it diversifies through the development of new real estate. These high standards will strengthen the real estate industry and speed its progress to maturity.
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