Interview: Sheikh Salim bin Ahmed Al Ghazali
How attractive is the real estate sector in Oman to domestic and foreign investors?
SHEIKH SALIM BIN AHMED AL GHAZALI: Real estate investment in Oman is the best business for investors. Luckily, the country offers many opportunities in various sectors that will help attract international brands. Most foreign investors look to invest their capital in a safe place, where they are comfortable and free to move in and out of the market. At the same time, the government has to consider the rules and regulations that are directly or indirectly hampering the investment of foreign capital. For example, the new labour and residential laws could, if some improvements were made to them, raise investor demand for real estate. Or, if expatriates who have had residency in Oman for more than 10-15 years were allowed to buy properties in the sultanate, this would encourage an influx of capital investment into the sector.
The real estate sector in Oman is booming, and the return on investment is comparable to other GCC countries. Even though decreasing oil prices have dampened demand, real estate investments still remain the investment of choice. Real estate incorporates various areas, from hospitality and tourism to real estate development, project management and construction, among others. We are working with the government to encourage both domestic and foreign investors in the sector. Ultimately, this will create job opportunities, benefit the investor and contribute to the development of the sultanate.
What can the private sector do to further align itself with Oman’s strategic development plan?
GHAZALI: We are aware that the government is facing a challenge from the fall in oil prices which, in turn, has put pressure on the private sector. As a private business, we seek to create new strategies and concentrate our focus on the activities that will help diversify the economy and add to the country’s GDP.
The burden falls on the private sector to identify and act upon the wide range of opportunities available in Oman that can be utilised as added value for the economy of the country. In the tourism sector, for example, we have seen that the government is putting a lot of effort into driving tourist revenues and is supporting most private sector endeavours. Oman’s political stability and complete absence of terrorist activity, as well as its location, the beauty of its natural landscapes and the good weather from October to March, are all characteristics that can be used to market the country’s tourist destinations and encourage visitors from different parts of the globe to visit the sultanate, which in turn supports the economic development of the country.
How do you assess the balance between mid-market and upper-market property?
GHAZALI: Considering the sheer number of Omanis and expatriates who desire to reside in the Muscat area, the demand for mid-market properties is likely to remain stable, as most of the youths and working expatriates looking for accommodation do so in the mid-priced property segment. The prices of real estate properties are expected to decrease by 5-10% because of the downturn in oil prices. But there are a lot of upcoming mid-level properties to help meet demand, especially in Bausher and Ghala.
The situation is not quite the same in the upper-market property segment, where demand is not expected to remain as high since most of the oil and petroleum companies are opting to downsize in order to deal with the current economic situation. This trend will have an impact on the prices of high-level properties. Only those developments with high-level finishing and facilities, such as gymnasiums and swimming pools, will retain the same level of demand. However, we assume that prices will come down by at least 5% as a result of the downsizing exercises.
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