Published on and written by Cyril Jarnias
Driven by a long-term vision, a massive influx of investment, and demand fueled by both Omanis and expatriates, Oman’s real estate market is undergoing a profound transformation. After several years of correction linked to the 2016 oil shock and the pandemic, prices are rising again, major urban projects are multiplying, and the rules of the game for investors, especially foreigners, have fundamentally changed.
This article details the trends in the real estate market (residential, commercial, logistics) based on the most recent data, while incorporating the regulatory framework and the major directions of Vision 2040.
A Market in Recovery, Boosted by Vision 2040
The essential starting point for understanding real estate in Oman is Vision 2040. This national roadmap, led by Sultan Haitham bin Tarik, aims to reduce dependence on hydrocarbons, develop non-oil sectors, and foster globally competitive, sustainable cities.
In this context, real estate plays a dual role: it supports economic diversification (offices, logistics zones, tourism, industry) and meets growing residential demand linked to demographics and urbanization. The numbers illustrate this rebound.
The total value of real estate transactions reached approximately $8.77 billion in 2024, representing growth of nearly 30% compared to the previous year.
In residential, the recovery is clear: the residential real estate price index climbed 18.7% year-on-year in the third quarter of 2025, with an increase of 6.4% just between the second and third quarters. Apartments showed +22.4% year-on-year during this same period, villas +16.5%, and residential land nearly +19.6%.
The size of Oman’s residential market is estimated at $4.96 billion in 2025.
Solid Growth Despite Oil Uncertainties
This recovery fits within a rather favorable macroeconomic framework. Nominal GDP reached OMR 41.1 billion in 2024 and could rise to more than OMR 80 billion by 2040, representing average growth of about 4.3% per year. The share of non-oil sectors is increasing, with non-hydrocarbon GDP up more than 4% in 2024.
However, public revenues remain largely dependent on oil (approximately 65 to 72% of state revenues depending on the year), which makes the real estate market structurally sensitive to energy cycles. Nonetheless, sovereign ratings (BB+ from Fitch, Ba1 from Moody’s, with positive or stable outlooks) and the rise of the Muscat Stock Exchange index reflect renewed confidence.
Residential: Between Price Rebound and Risk of Oversupply
The residential market in Oman is experiencing both strong growth and significant imbalances. In 2024, there are about 1.1 million housing units across the country, including nearly 723,000 villas and Arabic houses and about 379,000 apartments. Supply increased by about 3.6% over the year with the delivery of more than 38,000 new homes.
Villas Dominate, but Accelerated Rise of Apartments
Villas still represent nearly two-thirds of the residential stock and about 67% of the market value in 2024. They remain the preferred product for Omani households and more affluent expatriates, especially in established neighborhoods of Muscat.
Simultaneously, the apartment segment is experiencing the fastest growth. Apartment prices surged by 22.4% between the third quarter of 2024 and the third quarter of 2025, following a significant increase of 8.1% at the end of 2024. By 2030, this segment could see average annual growth exceeding 7.5%, driven by demand from young professionals, middle-class families, and expatriates seeking modern, well-located housing.
The data illustrates an upscaling of the Omani real estate market, particularly noticeable in Muscat. In the capital, the average price of downtown apartments reaches 1,000 to 1,200 OMR/m², nearly double the price in the suburbs (525 to 600 OMR/m²). Nationally, the average price for a downtown apartment is about 836 OMR/m², but this figure hides significant variations depending on the exact location and quality of services offered.
Here is an indicative summary of residential purchase price ranges:
| Property Type | Location | Total Price Range (OMR) | Current Price per m² (OMR) |
|---|---|---|---|
| Apartment | Oman (average) | 45,000 – 160,000 | 800 – 1,300 |
| Apartment | Muscat | 70,000 – 200,000 | 1,200 – 1,700 |
| Villa | Oman (average) | 150,000 – 300,000 | n.a. |
| Villa | Muscat | 220,000 – 420,000 | n.a. |
| Most Liquid Budget | Oman (investment) | 50,000 – 150,000 | n.a. |
The mid-range segment accounts for nearly half of transactions (49.1% market share in 2024), while the more limited volume high-end segment shows the highest growth rates (more than 7.7% per year anticipated for 2025‑2030).
Oversupply in Muscat, Mid-Term Tensions Elsewhere
Despite this price rebound, not everything is uniform. Muscat concentrates the most visible signs of oversupply: nearly 87,000 homes there are estimated to be unoccupied, representing about 20% of the capital’s residential stock. This high vacancy has already caused significant rent and price declines in recent years: up to –10 to –15% for apartments and –15 to –25% for villas before the turnaround observed since 2022.
The national average occupancy rate, around 85.2% in 2024, masks contrasting situations: villas and Arabic houses show a fill rate of about 87.5%, while apartments are only occupied at 80.8%, although this rate improved by about 3 points in one year.
Despite a planned pipeline of 142,800 homes by 2040, official estimates indicate an additional need of 340,000 units to maintain a 90% occupancy rate, facing a projected population of 7.7 million. The current oversupply could transform into a structural shortage.
A Highly Contrasted Price Geography
Performance gaps between regions are impressive. Muscat remains the market driver: in the capital governorate, residential land prices surged 48.3% year-on-year in the third quarter of 2025. Other coastal regions, like Musandam or North Al Batinah, also record strong increases in land values (up to nearly 30% for some quarters).
Conversely, several interior governorates (Al Buraimi, Al Dhahirah, Al Wusta, some areas of Sharqiyah) saw their land indices sometimes fall by more than 20% over the same period, reflecting more moderate demand and less attractiveness for international investors and tourism.
Commercial, Logistics, and Industrial: A Strategic Repositioning
Beyond residential, the office, retail, and warehouse markets are also undergoing rapid change, driven by the combined effect of Vision 2040, the rise of e‑commerce, and the development of major port hubs and special economic zones.
Offices and Retail: Premium for Quality and Green
The office market is dominated by Grade A spaces, concentrated in Muscat. In 2025, offices represent about one-third of the commercial real estate market value. Rents are holding for well-located newer buildings, while older or poorly adapted spaces face downward pressure, with a significant oversupply risk in the “Grade B” segment.
Investors are increasingly turning to sustainable assets: large international companies and banks subject to ESG targets seek certified buildings (LEED, BREEAM), capable of reducing their energy consumption and improving their image. The first “green” buildings are seeing rental premiums of around 7 to 10%, while some international lenders offer interest rate discounts of up to 50 basis points for certified assets.
In retail, the commercial real estate price index increased 14.6% year-on-year in Q3 2025. However, this average hides a marked decline in retail values: the price of shops fell 8.5% over the same period. This situation reflects the impact of the rise of e‑commerce and changing consumption patterns, leading to a polarization between prime malls and secondary retail spaces.
Projects like Mall of Oman (a LEED Platinum-certified mall), City Centre Sohar, or Salalah Gardens Mall illustrate this trend towards “lifestyle” destinations combining shopping, leisure, dining, and services, more resilient in the face of online retail competition.
Logistics, Free Zones, and Industrial Platforms: The Most Dynamic Segment
The true engine of commercial real estate in Oman today is on the logistics and industrial side. The Sultanate leverages a strategic geographic position, between Asia, Africa, and Europe, to develop major port complexes and free zones: Sohar, Duqm, Salalah, Al Mazunah, as well as the vast national railway network under development (about 2,200 km planned, with a budget of $15 billion).
Sohar Port and Freezone has attracted over $30 billion in cumulative investments.
In this context, logistics assets represent the commercial segment with the fastest growth, with a projected annual growth rate exceeding 7.4% until 2031. The development of online trade, the rise of regional transit, and tax incentives in free zones are stimulating demand for modern warehouses, distribution centers, and industrial parks. Stabilized net yields are generally in the range of 7 to 9% for “core” industrial assets, higher than for prime offices or retail.
The following table gives an order of magnitude of observed net yields on different commercial asset classes:
| Segment | Indicative Net Yield (range) |
|---|---|
| Prime Retail | 6.5% – 8.5% |
| Grade A Offices | 6.0% – 7.5% |
| Core Logistics / Industrial | 7.0% – 9.0% |
Demand Driven by Demographics, Expatriates, and Tourism
One of Oman’s particularities is the combination of a young and growing national population and a strong presence of expatriates, who play a key role in the rental market and, increasingly, in the investment market.
A Young and Urban Population
In 2024, the country’s population is around 5.3 million, of whom nearly 64% are under 30. By 2040, it could reach 7.7 million, representing an average annual increase of 2.4%. Muscat concentrates nearly 28.5% of residents, with an expected population of 2.7 million by 2040 (compared to about 1.5 million today).
Housing needs are considerable: the Ministry of Housing estimates that between 300,000 and 600,000 additional homes will be needed in Muscat by 2040 to meet demographic growth and urbanization, while over 500,000 housing requests are already registered nationally, and 125,000 families are believed to be inadequately housed.
The Driving Role of Expatriates
Expatriates represent about 40 to 44% of the population depending on the year, but a significantly higher proportion in the capital: nearly 61% of Muscat’s residents and over half of Salalah’s population. They form the bulk of long-term rental demand, especially in central neighborhoods and integrated complexes with services.
Amount, in Omani Rials, of real estate assets acquired by expatriates in the first half of 2024.
Tourism, Hotels, and Short-Term Rentals
Tourism is the other major driver of real estate demand, particularly in the hotel, vacation home, and short-term rental segments. The number of visitors grew by over 40% between 2022 and 2023, reaching about 3.5 million arrivals by the end of 2024. Tourism revenues are around OMR 2.8 billion, with annual growth of about 35%, and are expected to rise to OMR 3.3 billion in 2024, representing nearly 7.6% of GDP.
Number of new hotel rooms planned by 2030 under Vision 2040, representing an increase of about 25% over the current supply.
Niche markets like Salalah are experiencing a spectacular boom, especially during the Khareef (monsoon) season: summer 2024 attracted over one million visitors to Salalah, up 8.7% from 2023. This influx fuels demand for vacation homes, furnished apartments, and villas for rent, with annual rental yields potentially reaching 8 to 10% for well-managed seasonal rentals.
In the short-term rental segment in Muscat (Airbnb-type), recent data shows a median annual revenue of about $7,200, an occupancy rate close to 36%, and average nightly rates around $80. The best properties exceed $2,200 in monthly revenue with an occupancy rate above 70%, confirming the appeal of this model for investors willing to accept more active and riskier management. However, some Integrated Tourism Complexes, like Al Mouj, prohibit this type of rental, requiring careful review of homeowners’ association regulations.
Rental Yields and Attractiveness for Investors
For an investor, Oman offers a rarely matched trio of arguments: lower entry prices than in some neighboring markets, light taxation, and respectable to high rental yields depending on the segment.
Gross Yields Generally Between 5% and 8%
Available analysis places the average gross rental yield around 7% for residential, with significant disparities depending on property type, location, and strategy (long-term vs. short-term). Studios and small apartments show the best rates, around 7 to 8%, while large luxury villas tend to be around 4 to 5.5%.
Maximum average gross yield for rental apartments in certain central neighborhoods of Muscat.
The following table provides a simplified overview:
| Property Type | Location | Typical Gross Yield |
|---|---|---|
| Studio | Muscat / ITC | 7% – 8% |
| 1-Bedroom Apartment | Muscat | 6.5% – 7.5% |
| 2-Bedroom Apartment | Muscat | 5.5% – 7% |
| 3-Bedroom Apartment | Muscat | 4.5% – 6% |
| Villa / Townhouse | Muscat / ITC | 4% – 6% |
| Residential ITC (average) | ITC Oman | 5% – 8% |
Net, after accounting for management fees, homeowners’ association charges, maintenance, and municipal taxes on rents, yields generally settle between 3 and 5% for an individual investor, which remains competitive compared to other markets in the region.
Access Prices, Additional Costs, and Financing
Acquisition costs remain relatively affordable on a regional scale. Oman is generally cheaper than the United Arab Emirates but more expensive than Saudi Arabia. The price-to-income ratio is estimated around 3.8 according to some international indices, classifying the country in the still “affordable” market category.
The tax framework is very attractive: no personal income tax, no annual property tax, and no capital gains tax on real estate. The main charges include the registration fee (generally 3% of the property value, reduced to 1% for Omani citizens in some cases), agency fees (often borne by the seller), and legal fees (usually between 1% and 2%).
For rentals, a municipal tax of about 3% on rents is in principle due by the landlord. In Integrated Tourism Complexes, homeowners’ association and service charges are added, which can reach 1,000 to 1,500 OMR per year for an apartment, and even more for a villa.
Since 2023, access to mortgage credit has been extended to non‑Omanis. Banks generally require a down payment of 30 to 50%, with interest rates around 5 to 7% and loan terms up to 25 years. The value of mortgage contracts climbed nearly 45% in the first eleven months of 2024 to reach about OMR 2.1 billion, even though the number of contracts slightly declined, reflecting a shift towards higher-value loans.
Openness to Foreign Investors: ITCs, 99-Year Usufruct, and Golden Visas
One of the major evolutions in recent years in Oman concerns the legal framework for property ownership for foreigners. Where the country was long very restrictive, it is now multiplying mechanisms to attract foreign capital, while carefully regulating the open zones.
Integrated Tourism Complexes: Showcases of Openness
Integrated Tourism Complexes (ITCs) constitute the main channel for freehold ownership for non‑Omanis. In these integrated neighborhoods, with complete infrastructure (schools, retail, clinics, beaches, marinas, golf courses), foreigners can purchase apartments, villas, and land in freehold, with the possibility to transfer and mortgage their properties. Among emblematic ITCs are Al Mouj Muscat, Muscat Hills, Muscat Bay, Jebel Sifah, and Salalah Beach.
The rental yields for apartments and villas in Integrated Tourism Complexes (ITCs) in Oman typically range from 5 to 8%.
The most represented nationalities in these complexes are Indian, British, and United Arab Emirates nationals, who together represent over 57% of foreign buyers in ITCs.
99-Year Usufruct, Special Economic Zones, and Future Common Law
Beyond ITCs, the government has gradually opened other channels of ownership or quasi-ownership for non‑Omanis. A ministerial decision adopted in 2020 allows expatriates to acquire long-term usufruct rights (up to 99 years) in mixed-use collective buildings outside ITCs, with possibilities for extension and transfer to heirs. After more than four years of holding, these usufructs can generally be sold or leased to third parties.
Recent decrees authorize foreigners to acquire freehold ownership in special economic zones, free zones, and planned future cities like Sultan Haitham City, with leases of up to 99 years. However, restrictions remain for sensitive areas, including military, historical, or archaeological sites.
Residence by Investment and Golden Visas
Oman has implemented several residence programs for investors, which enhance the attractiveness of the real estate market. The main outlines are as follows:
– Renewable 5-year residence linked to a real estate investment starting from approximately 200,000 to 250,000 OMR depending on the programs.
– 10-year residence (“Tier 1”) for a higher investment, around 500,000 OMR or more, sometimes as a combination of real estate / business.
– First-class residence cards associated with real estate investments around $1.3 million.
– Possibility to sponsor family (spouse and children) and benefit from facilities to open bank accounts, start a business, or enroll children in school.
By the end of 2023, over 3,400 investors from some 60 countries had obtained a long-term residence permit. These mechanisms, combined with the absence of wealth tax and still non-existent personal income taxation, position Oman as a credible alternative for international investors seeking stability and yield.
Major Urban and Sustainable Projects: From Smart City to Net‑Zero
The structuring trends of the market are not limited to transaction figures. They also materialize in a series of major urban projects that are redrawing the country’s map, and in the emergence of a genuine “green” agenda for building construction and management.
New Cities, Reinvented Downtowns, and Master Plans
Several major development plans structure urbanization until 2040:
Overview of major planning and urban development projects underway or planned in Oman, aiming to structure metropolitan growth and create new smart cities.
Organizes the development of a 1,360 km² metropolis from Yiti to Barka, with new transport corridors, employment hubs, and planned residential neighborhoods.
A 14.8 km² smart city in Al‑Seeb, designed to host about 100,000 residents in 20,000 homes, with 39 schools, 11 health facilities, a large central park, and a structuring boulevard.
Plans about 7.3 km² of waterfront development, with over 12,000 homes and nearly 200,000 m² of commercial and hotel space.
Transforms a former administrative district of Muscat into a contemporary 3.6 million m² downtown, with 35- to 40-story towers, a marina, beach, pedestrian canal, cultural quarter, and government cluster.
Include Madinat Al Irfan (new business district), Khazaen Economic City (logistics and industrial hub in Barka), and the Future Cities Initiative (Sultan Haitham City, A’Thuraya City, Salalah Future City).
These programs are supported by massive investments in transport infrastructure (highways, airports, future Muscat Metro, national railway network, Oman‑UAE link), energy (deployment of solar and wind power), and urban services (water, sanitation, digital).
The Turn Towards Sustainable Construction
Parallel to this expansion, Oman is making a clear shift towards more energy-efficient and more environmentally friendly buildings. Several axes are emerging.
A new corpus of building codes and construction standards, developed with international bodies, incorporates minimum requirements for energy efficiency, fire safety, structural durability, and promotes the use of low-carbon materials like modernized rammed earth. The Ministry of Housing envisages a two-year experimentation phase on public projects before broader deployment, to calibrate economic constraints for developers.
On the other hand, “flagship” projects illustrate the possibilities offered by international certifications. Mall of Oman, the largest LEED Platinum certified building in the country, combines, for example, a shaded parking equipped with photovoltaic panels, an efficient cooling plant, a high proportion of local materials (over 40%), sorting and recovery of construction waste (over 80% diverted from landfill), and a dynamic monitoring system for environmental performance. The Alila Jabal Akhdar resort, the country’s first LEED-certified hotel, relies on local materials, water recovery and treatment systems, solar panels, and bioclimatic design to reduce its consumption.
The project The Sustainable City – Yiti, developed by OMRAN and Diamond Developers near Muscat, is an emblematic case of a sustainable city. Spanning nearly one million m², it aims for carbon neutrality by 2040 with ambitious goals: 100% renewable energy, 100% of waste diverted from landfill, complete water recycling, and a targeted 80% food self-sufficiency. The first phase of 300 homes is entirely sold and the second (about 500 units) shows a strong sales rate, with over half the buyers being Omani and the rest from nearly 30 nationalities. The project also demonstrates the profitability of sustainability by promising residents zero electricity bills, water bills cut in half, and zero maintenance fees.
The public authorities intend to capitalize on such examples to gradually generalize high energy performance buildings, both through regulation (mandatory codes from 2026) and financial incentives (preferential financing conditions for certified projects, support for energy renovation of the existing stock).
Digital, PropTech, and Smart Buildings: A Still Nascent Revolution
Beyond bricks and mortar, Oman’s real estate market is also beginning to transform under the effect of technology. The adoption of PropTech remains slower than in hubs like Dubai, but things are moving.
The authorities encourage the digitalization of procedures (one-stop shop for urban planning services, electronic registration of properties and mortgages via the “Amlak” platform, which handled over 133,000 transfers in 2024), while major private players are experimenting with new solutions: digital twins for building or infrastructure management, rental management platforms, virtual tours, smart energy management systems.
Next-generation Building Management Systems (BMS), like those from Siemens, centralize the control of air conditioning, lighting, security, parking, and preventive maintenance. Combined with solar panels and IoT sensors, they foreshadow “smart buildings” and can generate up to 20% savings on operating costs.
The potential is all the greater as operating costs represent about 80% of a building’s total lifecycle cost, compared to only 20% for the construction phase. In a country where building electricity consumption accounts for over 80% of total electricity demand, the energy issue is both environmental and economic.
Challenges and Risks: Costs, Bureaucracy, Oversupply, and Oil Dependence
Despite this generally positive outlook, the real estate market in Oman is not without challenges.
The first concerns the rising construction costs and the lack of skilled labor. The sector suffers from high dependence on imported materials – up to 70% on some projects – making budgets sensitive to global price fluctuations and logistics costs. In 2024, the construction cost of villas is estimated to have increased by about 9%, putting pressure on developers’ margins and household purchasing power.
Despite simplification efforts, the timeframes for obtaining permits or project approvals remain long due to overlapping local, regional, and national rules, which can deter small developers and international investors.
The third challenge is the risk of sectoral and geographical oversupply. Muscat has already experienced significant residential vacancy, and the Grade B office or secondary retail sector presents a risk of excess supply, while capital is flowing towards prime assets, logistics hubs, and more resilient segments (healthcare, education, tourism). For investors, this implies careful selection of locations and property types, favoring growth corridors identified by urban plans and zones supported by major infrastructure or industrial projects.
The economy remains vulnerable to a sustained drop in oil prices, which could reduce public revenues, slow investments, and affect confidence. The success of Vision 2040 and the development of non-oil sectors (logistics, industry, tourism, renewable energy, services) are essential to ensure the long-term stability of the real estate market.
Conclusion: A Market in Transition, Between Opportunities and Selectivity
The current trends in Oman’s real estate market outline a landscape in rapid transition. After a period of sometimes painful correction, the country is entering a phase of more structured growth, driven by a long-term vision, favorable demographics, unprecedented openness to foreign capital, and a growing commitment to sustainability.
For investors, this combination translates into: better financial performance and increased growth potential.
The Omani real estate market presents opportunities with attractive price levels on a regional scale and solid rental yields on certain residential and logistics segments. The legal environment is gaining clarity thanks to a new framework law on real estate regulation and digital registries. However, high selectivity is necessary in the face of risks of local oversupply, volatility linked to oil, and rising regulatory requirements (green buildings, strengthened codes, transparency obligations).
For Omani households, the coming decade will be marked by an abundant supply of housing, a wider range of typologies (from studio in an integrated residence to smart, energy-efficient villas), and significant public assistance (social housing programs, serviced plots, support from the Oman Housing Bank). For expatriates, the broadening of ownership rights, investment visas, and the modernization of urban neighborhoods open new prospects for long-term settlement and investment.
Implicitly, it is the very image of the country that is transforming: from a once-discreet real estate market, closely tied to oil fluctuations, Oman is gradually asserting itself as a structured investment destination, oriented towards smart cities, clean energy, and more balanced growth. The next ten to fifteen years will tell if this transformation can sustainably combine economic attractiveness, social cohesion, and respect for environmental limits.
Analysis of the Omani Real Estate Market
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
