Latest news with #residentialMarket
Zawya
26-06-2025
- Business
- Zawya
Oman: Why do we have so many vacant residential units?
Muscat: While we see several new housing projects being announced every day, we also come across lots of apartments sparsely or hardly occupied across the capital. Giving an insight into the situation, Khalil, Alzadjali, head of Oman, Cavendish Maxwell, said in an interview to the Observer, "Of the 38,000 residential units added to Oman's residential market in 2024, around 15,500 were apartments in Muscat. As these new units come online, many tenants opt to upgrade from older properties to newer, more modern apartments. This transition results in older units being vacated and listed for rent, contributing to the visible number of 'to let' signboards across the city." He added, "Additionally, it takes time for both new and existing units to be absorbed by the market once they become available for rent, which can further increase the apparent vacancy rate, even when overall occupancy remains high." The overall occupancy rate of over 80% is an average across the entire residential sector and does not reflect the variation between different locations, the age of buildings, and property types. "If demand remains strong for newer or better-located developments, some areas and some older buildings may experience higher vacancy rates. This dynamic turnover and the ongoing addition of new supply can make vacancies more visible, even in a generally healthy market. There is a growing demand for apartments in the new downtowns emerging across Oman. Most of these developments offer a modern, integrated lifestyle with convenient access to amenities such as retail and entertainment, all within walking distance in the community. Additionally, their advanced Infrastructure and proximity to business districts make them highly attractive to both Omanis and expatriates seeking a vibrant urban living experience. On the demand for business properties, he said, "The demand remains steady, particularly in urban centres and newly developed commercial districts. This trend is supported by government initiatives under Vision 2040, which aims to diversify the economy and attract international investment. As a result, there is ongoing interest in modern office spaces, retail outlets, and flexible commercial properties that serve both local and international businesses." Recent regulatory changes now restrict the operation of businesses from residential units; a move intended to professionalize and enhance the business environment and encourage companies to relocate to designated commercial spaces. This policy adjustment has contributed to increased Demand for purpose-built business properties, Alzadjali added. "While Oman's service industry has historically been highly local, there are indications that this may gradually change. The development of new downtowns, improved infrastructure, and government incentives is making Oman more accessible to regional and global service providers. Sectors such as tourism, logistics, healthcare, and professional services are seeing growing interest from international participants. As Oman's economy continues to evolve, the service industry may become more international in scope, with broader participation from foreign companies and a wider range of business offerings." There is potential to further enhance the sector by expanding zones where expatriates are permitted to purchase property. Currently, foreign ownership is limited to specific designated areas. Broadening these opportunities would likely attract greater interest from expatriates already residing in Oman, as well as increase investment from international buyers, thereby further boosting overall demand in the market. Additionally, policies that support the development of affordable housing could help address the needs of a broader segment of the population. By increasing the availability of reasonably priced homes, the market may see more balanced growth and improved access to housing for middle-income households. This approach could contribute to a more inclusive and sustainable real estate sector. To achieve a more balanced distribution of real estate activity across the country, continued investment in regional infrastructure, transportation networks, and public services will be essential, he said.
Khaleej Times
25-05-2025
- Business
- Khaleej Times
Abu Dhabi rents surge up to 12%: What is driving soaring rental prices in 2025?
Abu Dhabi's residential market has rapidly absorbed new supply over the past 18 months, driven by exceptionally high occupancy and surging demand, pushing rents up by as much as 12 per cent. Around 1,200 residential units, including 700 apartments and 500 villas, were delivered during Q1 2025 in Jubail Island, Bloom Living, and Al Raha Beach. Yet, occupancy levels remain robust, exceeding 95 per cent in many investment zones, according to Asteco. The development pipeline remains active, projecting nearly 5,500 further residential handovers by year-end, concentrated in key areas such as Yas Island, Masdar City, Saadiyat Island and Al Reem Island. A sharp rise in population, reaching 3.789 million as of September 2023, has significantly boosted demand from both tenants and buyers. "High occupancy rates were maintained across all Investment Zones, effectively absorbing the steady delivery of new supply over the past 18 months. Exemplifying this trend, newly constructed developments in areas such as Al Raha Beach report occupancy levels surpassing 95 per cent and achieving strong rental rates,' said the real estate consultancy. 'This widespread positive performance, characterised by increasing rents and high occupancy, underscores the fundamental strength and consistency of demand within Abu Dhabi's residential sector throughout the last three years,' it said. In the first quarter of 2025, average apartment rental rates increased by 4 per cent quarter-on-quarter and showed a significant 10 per cent rise year-on-year. 'Growth was particularly strong in the high-end segment, which experienced average rental increases between 8 per cent and 12 per cent. The mid-tier market also saw notable growth, with rents increasing between 5 per cent and 8 per cent, on average,' Asteco added. In the villa market, the luxury segment continued to lead rental growth, especially in prime locations such as Saadiyat and Yas Islands. Rental rates in some communities surged by as much as 15 per cent compared to last year. High-end villa communities also recorded significant gains, with average rental rates rising between 4 per cent and 7 per cent. Haider Ali Khan, CEO of Bayut, said Abu Dhabi's real estate sector in 2025 continues to build on last year's strong momentum, remaining an attractive destination for global investors. 'The influx of capital from sovereign wealth funds and the growing entrepreneurial landscape drive renewed interest in the emirate. With over 30 new projects launched, Dh7.8 billion in foreign investment recorded in 2024, and an increased focus on transactions, Abu Dhabi is establishing itself as a smart, future-ready hub for property investment,' he said. Recently, developer confidence remained evident throughout the first quarter, reflected in several significant residential projects' launches and/or announcements. With many developments encompassing residential and mixed-use components currently in the planning and early development phases, additional new project announcements are anticipated throughout 2025, said property brokerage firm Asteco.
