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The Residential Real Estate Market in Oman is segmented by Type (condominiums,villas and others), Key Cities, and Other Urban, Suburban, and Rural Markets.
Oman’s economic and financial situations are leading to a sharp decline in the demand and supply of the property market. The real estate market in Oman witnessed slow growth in 2018. However, there were improvements in certain areas. Real estate transactions witnessed an increase of 1.2%, as compared to 2017, although sales contracts witnessed a decline by a percentage point.
In the residential sector, prices continued to decrease as the demand remained subdued overall. A combination of factors, including readjustment of salaries and job losses in key sectors and new project handovers, are expected to impact the market’s growth.
Government initiatives, like The National Program for Enhancing Economic Diversification (Tanfeedh) and the establishment of new industrial estates offering tax exemptions to investors, along with competitive advantages on imports and customs duties, are expected to drive the growth of the sector. The government’s target of attracting 21 million tourists by 2035, an increase from 8 million in 2015, as part of efforts to diversify the economy is expected to provide various growth opportunities to the sector. Furthermore, developers are breaking ground or nearing completion of several new projects.
Rents and prices in Muscat’s residential property market are declining, as the market continues to be oversupplied with apartment blocks. The demand-supply imbalance is expected to drive the increase in volume of new units, which is expected to surpass the demand, although the pace of growth of this gap is slowing down. Affordable units of housing are expected to witness high demand, causing a stronger rental decline in premium locations.
The real estate market is witnessing sustainable demand, primarily due to the expanding young population structure.
The report provides key insights into the residential real estate market of Oman. It includes an overview of market dynamics, technological trends, and government initiatives in the residential real estate market. Moreover, the report sheds light on the key trends in the market, like factors driving the market and restraints to the market’s growth, along with opportunities. Additionally, the competitive landscape of the residential real estate market of Oman is depicted through the profiles of active key players.
|By Key Cities|
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As per the official sources, the occupancy rate of residential buildings in Muscat was valued at 70%. Moreover, the value was as low as 50% in areas outside the capital, and the lowest recorded in the Sultanate’s history.
In Oman, the number of building permits was 23,881.000 units in 2018. The number of residential building permits declined by 1.1%, to 23,881, in 2018, from 24,149 in 2017 and 31,868 in 2016. It is considered as a decline from an average of 31,000 units in 2011-2016, while an increase from an annual average of 15,000 units in 2007-2010 and 7,000 units in 2002-2006. The residential building permits were averaged to 12,252.500 units from December 1997 to December 2018.
According to the official sources in Oman, the sultanate’s Ministry of Housing allotted 10,925 residential plots across the country by the end of May 2019.
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Overseas migrants have been playing a vital role in terms of development of the Omani economy and infrastructure. The Ministry of Manpower introduced the expatriate visa ban in January 2018, to reduce the number of unemployed locals, as part of the Omanization project. The ban has been extended several times. As of March 2019, about 55,000 expats, who previously worked in Oman, were laid off by companies, based on government estimates.
Due to the decline in the number of expats who rent out property, the market witnessed a decline in rentals and investments. As per calculations, the drop is quite substantial, with numbers valued at 2.03 million people in May 2019, as compared to 2.09 million people in May 2018.
In the short to medium term, the outflow of skilled foreigners and the inflow of unskilled foreigners is expected to result in downward pressure on residential rents.
However, it is not just expatriates who are shifting from higher-end properties. Although young, middle-class Omanis prefer living in traditional villas, they are sometimes considered to be too expensive. As this demographic group starts families, their budget constraints are expected to lead to an increase in the demand for more affordable housing, such as apartments.
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The residential real estate of Oman is fragmented due to the presence of numerous players in the market. The increasing demand for already constructed better-designed houses was primarily from the traditional Omani population, as people do not seek to involve themselves in the purchase of land and construction of houses. The market is still absorbing new projects and modern housing seekers ware expected to invest in the real estate sector. Thus, various companies are focusing on launching and marketing new projects, along with entertainment and stability for residents. The market is witnessing slow growth due to the declining demand and increasing supply, which resulted in a considerable gap, while exacerbating price pressures. Key market players include Al Mouj Muscat, Majan Development Company, AlRaid Group, and WUJHA Real Estate.
1.1 Study Assumptions
1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. Market Insights
4.1 Current Economic Scenario and Consumer Sentiment
4.2 Residential Real Estate Buying Trends, along with Socioeconomic and Demographic Insights
4.3 Government Initiatives and Regulatory Aspects for the Residential Real Estate Sector
4.4 Insights into the Size of Real Estate Lending and Loan to Value Trends
4.5 Insights into Interest Rate Regime for General Economy and Real Estate Lending
4.6 Insights into Rental Yields in the Residential Real Estate Sector
4.7 Insights into Capital Market Penetration and REIT Presence in the Residential Real Estate Sector
4.8 Insights into Affordable Housing Support provided by Government and Public-Private Partnerships
4.9 Insights into Technology and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)
4.10 Market Dynamics
5. Market Segmentation
5.1 By Type
5.1.3 Other Types
5.2 By Key Cities
6. Competitve Landscape
6.1 Market Concentration
6.2 Company Profiles
6.2.1 Al Mouj Muscat
6.2.2 Majan Development Company
6.2.3 Al Raid Group
6.2.4 Wujha Real Estate
6.2.5 Al-Taher Group
6.2.6 Maysan Properties SAOC
6.2.7 Orascom Development Holding AG
6.2.8 Harbor Real Estate
6.2.9 Edara Real Estate LLC
7. Future of the Market and Analyst Recommendations
8. Investment Analysis of the Market
10. About Us
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