(MENAFN- Muscat Daily) Oman Real Estate Association (ORA), the newly-formed umbrella organisation of the real estate sector in Oman, is trying to develop the real estate market by making it more organised and transparent.
In an interview with Muscat Daily, Saleh Nasser al Riyami, member, board of directors at ORA, talks about the recent trends in the real estate market, the need for professional practices, and the introduction of a real estate price index to curb speculation and raise transparency levels.
What are the main objectives of ORA? How does the association help improve transparency and stability in the real estate market?
As a non-profit organisation, the main objective of the association is to effectively contribute to professionalise, organise and develop the real estate market in Oman. Our aim is to make ORA a platform between the government bodies and the private sector to help all those who are involved in the real estate market and represent Oman's real estate sector at the local and global level.
We also contribute with our suggestions for better implementation of the existing laws and the regulations governing the real estate sector. The laws and regulations for the real estate sector are already in place, but are not being followed in an active manner - which is worrisome for lots of people involved in the transactions.
The real estate market comprises buyers, sellers, developers, brokers and intermediaries, but the industry as a whole is not well organised. The market also faces challenges in terms of speculative practices, wherein experienced brokers and agents are involved.
ORA recently advocated the setting up of a price index for the real estate market. When do you think the real estate price index will be introduced? How will this help in stabilising the market?
We believe buyers and sellers deserve to know the actual price trends in the real estate market and, therefore, there is a need of a real estate price index. We are closely working with the Ministry of Housing's registration department to create a real estate price index. We need to conduct extensive exercises and learn from the experience of other cities in the region that have successfully introduced this type of index. Our objective is to create the new index in such a way that it represents all the factors that drive the prices in the real estate market. We have to learn about best practices in this regard.
We plan to organise a real estate symposium in the middle of this year, wherein four to five major subjects related to the real estate market will be discussed – among them, the price index will be a major subject. It is an interesting subject and the market is eager to see and use the price index to make informed decisions.
The index will be set up in cooperation with the Ministry of Housing and the Ministry of Commerce and Industry. Our priority will be to create and introduce this index by the end of this year.
Is Oman's real estate market being driven by speculative practices rather than a realistic price mechanism?
Speculation on prices have a very heavy impact on our real estate market. However, these speculations are based on certain factors like salary increases, infrastructure development, available basic facilities like highway, school and hospitals that give an indication that prices will rise in a particular area. But the issue is that the market is relying too much on these indications and prices are increased without knowing the facts. Sellers and brokers attract buyers with these factors and buyers become interested in paying much higher prices than the fair value.
We are not asking people to make their decisions based only on the price index, but we want to help them by providing the required information that represents the facts. Our objective is to enhance the level of market understanding in a more professional way. We are also planning to train Omanis to become professional and licensed brokers in the market and to have the authority to finalise deals in the market.
Recently, there were reports about establishing a 'single-window' system for the facilitation of all real estate related investment and development. What is the current status of this initiative and how will it help the real estate sector?
ORA and different government bodies have already shown their interest in setting up a 'single-window' system so that people do not need to approach different government departments and agencies to get approvals. At present, real estate investors and developers need to approach several government agencies that include the ministries of Housing, Commerce and Industry, Muscat Municipality, Ministry of Regional Municipalities and Water Resources, Public Authority for Electricity and Water, and even the Ministry of Transport and Communication, for approvals.
We believe there are lots of better mechanisms that can be implemented to organise the sector and the approval process. We already have success stories relating to the 'single-window' system in Oman – for example, the Ministry of Commerce and Industry has successfully introduced a one-stop shop to help people get their paper works done at one place and the ROP has also implemented something similar.
Considering all these factors, there is a need for a 'single-window' system, wherein all the concerned government bodies and ministries can work together under one roof to ease the approval process. This will help to save the time and effort of both the government agencies and the ministries, as well as the people seeking approvals.
The 'single-window' system can be managed by government authorities and ORA, as a non-profit organisation, can also be a part of it. We have already conducted a number of meetings with different ministries regarding this initiative and we have received very good feedback. We hope a committee will be created soon to implement this initiative.
What are the other major challenges faced by the real estate market?
The biggest challenge is to organise the real estate sector to make it an efficient market in the best interests of buyers, sellers and all those involved in the sector. If we have a well-organised market, we will be better able to control speculative practices.
The other challenge is that there is not much foreign investment coming into the real estate sector in Oman due to restrictions. If we have clear guidelines to attract foreign investment in real estate, it will help the market, as well as the economy. Oman has a fantastic geographical location that appeals to lots of people in other countries, attracting them to buy property here.
There are lots of ideas that we have at the association and we think it will be in the interest of the real estate market, brokers, government agencies and the people of the country to make the real estate market well organised and well structured.
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