SURGING MARKET, EXPAT BUYING HOT TOPICS OF HOME

UNCLAS MUSCAT 000071 SIPDIS SIPDIS STATE FOR NEA/ARP COMMERCE FOR ITA COBERG E.O. 12958: N/A TAGS: ECON EFIN EINV MU SUBJECT: SURGING MARKET, EXPAT BUYING HOT TOPICS OF HOME SHOW ¶1. On January 16, Mohsin Khamis al-Balushi, Senior Advisor at the Ministry of Commerce and Industry, opened the 2007 International Property Exhibition. The exhibition showcased various real estate projects under development in Oman. Salam Yiti Luxury Resorts in Oman (which is a member of Sama Dubai),Alargan Towell Investment, and Tameer Investment served as the main event sponsors. Local banks also were on-hand to promote their respective home mortgage programs. ¶2. CommAssistant discussed the recent surge in real estate prices with Lee O'Donoghue, Manager of Mortgage Services for international leasing firm Hamptons. O'Donoghue commented that the Muscat rental market over the past 6 months had become heated, with properties in the traditional expatriate areas increasingly harder to find. As a result, rental prices jumped by as much as 50% over the course of 2006, with further price rises predicted. O'Donoghue added that the commercial leasing sector was tightening as a result of the large number of new arrivals and the expansion plans of established companies. ¶3. O'Donoghue further explained that his company's clientele was growing in response to the recent government decision to allow expatriates to purchase freehold property in designated tourist zones, based on Royal Decree 12/2006 - "The Acquisition by Non-Omanis of Real Estate in Integrated Tourist Complexes." The law represents the first time foreign individuals and companies will be able to purchase property in Oman with the security of knowing that the property will be registered in their name at the Ministry of Housing, Electricity and Water. Banks have responded to the law by formulating new mortgage programs for expatriates. Bank Muscat, for example, now offers expatriates mortgage packages covering up to 60% of the loan, in contrast to packages offered to Omanis, which can cover up to 100%. GRAPPO