Friday 15 / November / 2024
Muscat: Jittery tenants are opting for three and six-month rental agreements instead of one year as the economic crunch continues to bite, according to realtors.
“It’s true that some agents are going for three and six-month agreements instead of one year.
Read also: Residential rents dip in Muscat, says Cluttons
“This is because of the uncertainty that some tenants are facing. To stay safe, they prefer short agreements for three or six-month depending upon their situation, rather than having a one year contract and ending it abruptly in an unforeseen situation as that can have its own implications.
“Otherwise, they are willing to move out if the agents/landlords don’t agree. The agents/owners also don’t want to see their properties lying vacant, therefore, they accept this as a better option,” Country Operations Manager of Eqarat, Salman Jalil, said.
Sudhakar Reddy, CEO, Al Habib, said: “We normally get request for short-term contracts, but that is a minor percentage of the total. Majority still opts for one-year contract, but few ask for the short terms.”
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He added: “We fulfil demands of people. Some come and tell us that they have been terminated, so have to oblige them. What is the reason for one-year contract when someone is not secure about their job, so we extend for two months, three months and six months if people request us.”
Indian expat, Gautham S, who has recently signed a three-month rent contract, said that the market situation is volatile and he is not sure about his future.
“We are not sure of staying here for long, so we are going for the three-month agreement for the last six months,” he said.
Real estate agents admitted that rents are falling all over Muscat and in every street people can see notices for rents on buildings.
“Rents are falling and this has to do with the current market conditions and the demand and supply imbalance. Cost cutting and savings are top priorities and tenants are no exception. They want to pay less and demand reduction in rent,” said Salman Jalil.
“There are two choices for the agents/landlords: Don’t reduce the rent and let the tenant go, or reduce and let the tenant stay. The agents/landlords are going for the second option as they stand to lose more if they don’t oblige. Tenants have many options available, and many tenants move to different properties even if the difference in rent is insignificant, because of the many options of newer properties available,” Salman Jalil added.
The spokesperson for Al Habib, however, said that the rental pressure is location specific.
“Some locations have more rent pressure, some don’t, good location rents are still holding up. CBD, Qurum, Al Khuwair, Ghubra are holding up, a little bit of pressure is in Mabela and other localities. Yes, there has been a bit of a slowdown in the property market, there is no doubt about it, but that is not enough to expect a significant deductions,” he said.
Real estate businessmen in Muscat said rent prices have dropped significantly from their peak rates of 2007/2008.
“This is simply because there is more supply in some areas compared to what is required,” admitted a real estate agent.
According to realtors, the skyline of Muscat is undergoing a rapid change as older buildings make way for new ones to keep pace with the times.
“That is one of the reasons old buildings are really struggling to get tenants,” a real estate agent said. Most of these buildings came up post-1960.
