Oman Property Market Reports

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Oman Property Market Report: Trends, Insights, and Forecasts 2025

The Oman property market is steadily carving its place as an attractive destination for investors and residents, fueled by economic diversification, government reforms, and a growing tourism sector. As the Sultanate aligns with Vision 2040, its real estate landscape is evolving, offering opportunities across residential, commercial, and hospitality segments. This comprehensive report explores the latest trends, market dynamics, and projections for Oman’s property market, providing valuable insights for stakeholders.

Overview of the Oman Property Market

Oman’s property market encompasses residential apartments, villas, commercial offices, retail spaces, and hospitality developments. Valued at approximately USD 4.38 billion in 2024 for the residential sector alone, it is projected to reach USD 6.80 billion by 2029, growing at a compound annual growth rate (CAGR) of 9.19%. The commercial segment is expected to hit USD 2.22 billion in 2025, with a CAGR of 5.37% through 2030. These figures reflect Oman’s resilience amid global economic challenges and its appeal as a stable investment hub.

Key Trends Shaping the Oman Property Market

Several trends are driving the transformation of Oman’s real estate sector, blending modernization with the Sultanate’s cultural heritage. Below are the most significant developments influencing growth.

Vision 2040 and Economic Diversification

Vision 2040 is a game-changer for Oman’s property market, emphasizing non-oil sectors like tourism, logistics, and manufacturing. The government’s push for foreign investment through relaxed property ownership laws has boosted demand, particularly in Muscat. Initiatives like the Investor Residency Program, which issued over 2,700 cards by 2023, are attracting expatriates and investors, fueling residential and commercial growth.

Growing Demand for Affordable Housing

Affordable housing is a priority, with developers focusing on apartments and mid-range villas to cater to young professionals and families. Muscat’s residential supply includes around 435,000 units, but high demand in areas like Al Mouj and Qurum has led to rental shortages. Government-backed projects and public-private partnerships are addressing this gap, with plans for thousands of new units by 2030.

Surge in Luxury and Mixed-Use Developments

Luxury properties and mixed-use communities are gaining traction, particularly in coastal areas. Projects like AIDA, featuring a Trump golf course, and Muscat Bay combine high-end residences with retail and hospitality amenities, appealing to affluent buyers and tourists. Mixed-use developments offer convenience, blending homes, offices, and leisure spaces, and are reshaping urban hubs like Al Ghubra and Shatti Al Qurm.

Tourism-Driven Hospitality Growth

Oman’s tourism sector is booming, with Salalah welcoming over 1 million visitors in 2024’s summer alone, an 8.7% increase from 2023. This growth is spurring hospitality investments, with hotel revenues reaching USD 242 million in 2023, up 10.7%. Integrated tourism complexes (ITCs) like Hawana Salalah are blending residential and hospitality offerings, boosting demand for short-term rentals and vacation homes.

Sustainability and Smart Homes

Eco-friendly building practices are on the rise, driven by global trends and local demand for energy-efficient homes. Developers are incorporating smart technology, such as automation systems, in projects like Hay Al Naseem. These features appeal to tech-savvy expatriates and young Omanis, enhancing property value and marketability.

Infrastructure and Urban Planning

Strategic infrastructure projects, including new roads, airports, and logistics zones, are enhancing connectivity. The Oman National Spatial Strategy 2040 is expanding Muscat westward to areas like Al Mabellah and Sultan Haitham City, creating new residential and commercial hubs. The Batinah region is also emerging as a property hotspot due to improved transport links.

Residential Real Estate Market

The residential sector is the cornerstone of Oman’s property market, driven by expatriate inflows and a growing local population. In 2024, residential transactions peaked in May, with 6,638 sales contracts, reflecting robust demand.

Pricing and Rental Trends

Apartment prices in Muscat range from OMR 30,000 to 60,000 for mid-range units, while villas start at OMR 80,000. Rental yields in premium areas like Al Mouj average 6–8%, though oversupply in some segments has softened rents by 10–15% for apartments and 15–25% for villas over the past 18 months. Affordable housing initiatives are stabilizing prices, making homeownership more accessible.

Supply and Demand Dynamics

Muscat’s residential stock includes around 87,000 unoccupied units, nearly 20% of supply, indicating oversupply in certain areas. However, high-demand locales like Al Mouj and Muscat Hills face shortages, driving competition among renters. Expatriates, who make up 40% of Oman’s population, continue to fuel demand, though Omanization policies may temper this in white-collar sectors.

Key Regions

Muscat: The capital dominates with luxury projects like Residences at Mandarin Oriental and affordable developments in Al Khuwair.

Salalah: Coastal demand is rising, driven by tourism and projects like Amazi in Hawana Salalah.

Sohar: Industrial growth is boosting housing demand, particularly for mid-range apartments.

Commercial Real Estate Market

Oman’s commercial sector is expanding, supported by government incentives and economic growth. The market is projected to grow from USD 2.10 billion in 2024 to USD 2.89 billion by 2030.

Office Space Demand

Muscat’s office market is recovering, with Grade A rents averaging OMR 7–10 per square meter monthly. Demand is rising for co-working spaces and startup-friendly offices, driven by Vision 2040’s focus on SMEs. Areas like Al Ghubra and Airport Heights are emerging as business hubs.

Retail and Logistics

Retail is evolving with experiential malls integrating dining and entertainment. Logistics real estate is surging, particularly in Sohar, where industrial zones support e-commerce and manufacturing. The Ministry of Commerce’s USD 520 million investment program is accelerating industrial growth, boosting demand for warehousing.

Hospitality Sector Performance

The hospitality sector is a standout, driven by Oman’s tourism ambitions. Three- to five-star hotels saw a 44.9% occupancy increase in 2021, with further gains in 2024. Projects like AIDA and Fanar Views are adding thousands of rooms, targeting luxury and mid-range travelers. Short-term rentals in Salalah and Muscat offer investors yields of 7–9%.

Challenges in the Oman Property Market

Despite its potential, the market faces obstacles:

Oversupply in Residential: Excess units in Muscat could pressure prices unless demand catches up.

Economic Sensitivity: Fluctuating oil prices may impact investor confidence, though diversification mitigates this.

Regulatory Navigation: While reforms have eased foreign ownership, bureaucratic hurdles persist for some investors.

Future Outlook for the Oman Property Market

Oman’s property market is set for steady growth through 2030, with key projections:

Residential Growth: Demand for affordable and luxury homes will rise, supported by expatriates and tourism.

Commercial Opportunities: Office and logistics spaces will benefit from SME growth and industrial investments.

Hospitality Boom: Tourism projects will drive demand for hotels and vacation homes, particularly in Salalah and Muscat.

Sustainable Development: Smart, eco-friendly projects will dominate, aligning with global trends.

How to Succeed in the Oman Property Market

To thrive in Oman’s real estate landscape:

Target High-Demand Areas: Focus on Muscat’s coastal zones or Salalah’s tourism-driven markets.

Leverage Digital Tools: Use platforms like Al Bayan Real Estate for virtual tours and market insights.

Explore Financing Options: Take advantage of government incentives and low-interest mortgages.

Partner Locally: Collaborate with firms like Al Mouj Muscat or Savills Oman to navigate regulations.

Oman’s property market is a blend of opportunity and innovation, driven by Vision 2040’s forward-thinking policies and a vibrant tourism sector. From affordable apartments to luxury waterfront villas, the Sultanate offers diverse options for buyers and investors. By staying attuned to trends like sustainability, mixed-use developments, and digital transformation, stakeholders can unlock the market’s full potential. Oman’s stable economy and strategic reforms make it a compelling choice for long-term real estate success.

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