Oman Real Estate Market Report - December 2024
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Key Takeaways
Market Growth: Oman’s real estate market demonstrated a 5.4% year-on-year (YoY) increase, with total property dealings reaching OMR 1.93 billion by December 2024, up from OMR 1.83 billion in December 2023.
Residential Price Trends: The residential price index declined by 1.9% in December 2024, driven by a 17.3% drop in apartment prices, although villa prices rose marginally by 0.8%.
Commercial Sector: The commercial real estate market remained steady, supported by government-driven infrastructure projects and increased foreign investments.
Mortgage Market Surge: The total value of mortgage contracts in Oman rose by 47.9% YoY, totaling OMR 2.018 billion across 17,187 contracts in December 2024, reflecting increased investor confidence and financing activity.
Regional Highlights:
Muscat: Luxury properties saw demand, despite an overall 7% decline in residential prices.
Sohar: Emerging as an industrial and residential hub, with an 18.8% rise in residential prices.
Salalah (Dhofar): Continued growth in hospitality-focused projects.
Nizwa: Witnessed increased demand for affordable housing, despite a 4.2% decline in apartment prices.
Musandam: Declined 15.7% in land values, but remains a niche investment area.
Comparative Analysis: December 2023 vs December 2024
Investment Opportunities: Government reforms and infrastructure investments continue to attract foreign investors, especially in mixed-use developments and special economic zones.
Market Overview
In December 2024, Oman’s real estate market demonstrated resilience amid global economic challenges. It was supported by strong government initiatives such as foreign ownership policies in Integrated Tourism Complexes (ITCs) and infrastructure development. The growing mortgage market and diverse regional performance highlight the sector’s evolution.
Economic growth is a key driver, with the International Monetary Fund (IMF) projects Oman’s GDP growth to reach 2.7% by the end of 2024, up from 1.6% in 2023, signaling a positive economic trajectory.
Real Estate Transactions: Total transactions in December 2024 reached 0.45 billion OMR, a 12.5% increase from December 2023.
Foreign Ownership: Recent legislation allowing foreigners to own properties in designated areas continues to attract expatriates and overseas investors.
Urbanization: Rapid urbanization in major cities such as Muscat and Salalah is boosting demand for residential and commercial properties.
Residential Market Performance
General Index: The residential real estate price index declined by 1.9% in Q3 2024, indicating a cooling in the residential market.
Apartments
Price Trends: Prices fell 17.3% YoY, due to oversupply and shifting demand toward villas and suburban homes.
Demand Drivers: Preference for affordable and mid-range properties led to a decline in high-end apartment demand.
Cities Impacted:
Muscat: Apartment prices declined 16.7%, reflecting oversupply in older neighborhoods.
Nizwa: Prices fell 4.2%, but demand for mid-range units grew.
Villas
Price Trends: Villas saw a 0.8% YoY increase in prices, reflecting sustained demand for luxury and waterfront properties.
Market Shift: Villas in gated communities and waterfront developments remain highly sought-after.
High Demand Areas: Al Mouj in Muscat and Salalah’s beachfront developments.
Regional Residential Trends
Commercial and Industrial Market Trends
Office Spaces
Key Cities: Muscat experienced strong demand for Grade A offices, with a 5.1% rise in rental rates YoY.
Drivers: Government incentives and growth of local enterprises.
Retail and Hospitality
Trends: Mixed-use developments in Muscat and Salalah continued to attract investments, while traditional retail spaces struggled.
Industrial Sector
Sohar: A 3.5% increase in land values, driven by port and industrial expansion.
Duqm: Investments in infrastructure positioned it as a logistics and industrial hub.
Mortgage Market Trends
Overview
Total Value: Mortgage contracts reached OMR 2.018 billion in December 2024, a 47.9% YoY increase from OMR 1.36 billion in December 2023.
Number of Contracts: The total number of mortgage contracts rose to 17,187, indicating strong financing activity in residential, commercial, and industrial segments.
Key Drivers:
Increased investor confidence in Oman’s economy.
Expansion of housing loans, particularly in Muscat and Sohar.
Flexible financing schemes introduced by major banks and lenders.
Regional Mortgage Distribution
Trends in Mortgage Contracts
Residential Properties: Represented 68% of total mortgage contracts, highlighting strong demand in housing loans.
Commercial Properties: Accounted for 20% of total mortgage value, driven by demand for retail and office spaces.
Industrial Properties: Made up 12% of mortgage contracts, focusing on Sohar and Duqm’s industrial development.
Regional Analysis
Muscat
Highlights: The capital city remains the focal point of real estate activity, with high demand for luxury waterfront and integrated developments.
Residential Land Values: Declined by 5.5% YoY, while luxury property demand increased.
Key Developments: The Al Mouj and Madinat Al Irfan projects continue to draw significant interest from investors.
Salalah (Dhofar)
Residential Land Values: Decreased by 5.1% YoY, primarily due to lower demand for second homes.
Tourism Influence: Hospitality and resort-style developments are key drivers of growth in this region.
Musandam
Challenges: The governorate experienced the steepest decline in residential land values, down by 15.7% YoY.
Opportunities: Strategic location near the Strait of Hormuz presents opportunities for niche tourism and logistics-related developments.
Sohar
Recorded the highest increase in property values, signaling regional growth potential.
Commercial Sector: Witnessed a 3.5% increase in land values, driven by industrial expansion.
Residential Trends: Affordable housing remains a key growth area.
Nizwa
Market Trends: Affordable housing demand increased despite a 4.2% drop in apartment prices.
Tourism and Heritage: Boosted interest in boutique developments.
Comparative Analysis: December 2023 vs. December 2024
Investment Opportunities
Luxury Developments: Gated communities and waterfront properties in Muscat and Salalah.
Industrial Projects: Sohar and Duqm offer growth in logistics and industrial real estate.
Affordable Housing: Strong demand in Nizwa and North Batinah.
Commercial Spaces: Opportunities exist in retail and office spaces to cater to the expanding urban population.
Economic Zones: Duqm and Salalah offer attractive incentives for investors.
Hospitality Projects: Growth in tourism is fueling demand for resort-style developments.
Tourism-Driven Projects: Resort-style and mixed-use developments in Dhofar and Musandam.
Conclusion
December 2024 marked a year of recovery and opportunity for Oman’s real estate sector. While some residential segments saw price corrections, the overall market growth and increasing transaction volumes underscore investor confidence. With regional variations and emerging investment hotspots, the market offers diverse opportunities for both local and international investors.
Sources
Statista: Oman Real Estate Overview
Zawya: Residential Property Price Trends
Cityscape Intelligence: Market Growth Analysis
Economy Middle East: Transaction Volume Trends
Kanebridge News: Price Index Movements
Disclaimer: This report is for research and educational purposes only. It does not constitute investment advice. Readers are encouraged to conduct their own research and seek professional advice before making investment decisions.
