Oman is poised for a transformative period in its real estate market, projecting the addition of 62,800 new homes by the year 2030. Factors such as increasing foreign ownership, affordable pricing, and a surging population are fueling a promising boom in Oman’s real estate sector. The influx of new housing is anticipated to not only accommodate the growing demand but also align with the national development strategy outlined in Vision 2040, aimed at diversifying the economy and reducing oil dependency. This article explores the key developments in Oman’s real estate landscape and the implications for both locals and international investors.
Growth in Hotel and Residential Real Estate
According to Cavendish Maxwell’s Oman real estate market performance report, the Sultanate is set to add 5,800 hotel rooms to its current inventory over the next five years, with 35 new hotels and resorts scheduled to open by 2030. This expansion will increase the total number of hotel rooms by approximately 25 percent.
The residential real estate market is also showing promising growth. In 2024, Oman’s residential inventory increased by 3.6 percent, delivering 38,400 new homes and raising the total supply to approximately 1.1 million units. Most of this new residential supply is concentrated in Muscat, with significant contributions from Al Batinah North and South, as well as Dhofar.
Projected Population Growth and Housing Demand
Part of the ambitious Vision 2040 initiative is fostering expansion across real estate, infrastructure, hospitality, and tourism sectors, aiming for non-oil sectors to make up 90 percent of the economy by 2040. The population, currently at approximately 5.3 million, is projected to reach around 7.7 million, driven by increasing numbers of Omani nationals and expatriates.
More than 80,000 new homes are expected to be delivered by 2040. However, Cavendish Maxwell warns that the rapid population growth may potentially lead to a shortfall in residential properties, despite the significant number of new homes being built. A further 340,000 new homes will be necessary to maintain a sustainable occupancy rate of 90 percent.
Investment Opportunities and Integrated Tourism Complexes
The development of Integrated Tourism Complexes (ITCs) is crucial for the future of Oman’s real estate sector, particularly as they offer non-Omani nationals the chance to own freehold properties at more affordable prices than many other parts of the Gulf Cooperation Council (GCC). The pricing for ITC apartment sales usually lies between OR800 and 1,100 ($2,080 – $2,860) per square meter, making them more accessible than similar properties in Dubai, Abu Dhabi, and Doha.
The rental yields at Oman’s ITCs range from 5 percent to 8 percent, comparable to those in other major GCC cities. Villa prices are set between OR750 and 1,000 ($1,950 – $2,600) per square meter, emphasizing the value proposition Oman offers to investors and homeowners alike.
Tourism and Economic Outlook
Oman’s tourism sector continues to witness a steady rise, reflecting growing demand from both international visitors and local travelers. In 2024, the country’s four airports accommodated 14.5 million passengers, marking a year-on-year increase of 2.5 percent. Hotel occupancy rates across Oman remain robust, averaging 85.2 percent, with villas and traditional Arabic houses seeing an even higher occupancy rate of 87.5 percent.
As the local economy supports a flourishing tourism industry, hotel revenues surpassed pre-pandemic levels in 2024, with 2.15 million guests staying in Oman’s three to five-star hotels. With government initiatives bolstering investor confidence and favorable demographic trends, the real estate, tourism, and hospitality sectors are well-positioned for sustained growth.
Looking ahead, Oman’s dedication to boosting its real estate sector, combined with initiatives aimed at attracting foreign investment, is vital for ensuring the housing market’s long-term resilience. This commitment to proactive planning and development will be essential in meeting the anticipated demand and sustaining the growth trajectory in the coming years.
Tourism is on the rise in Oman, mirroring the growing desirability of the country as a travel destination. In 2024, hotel occupancy rates rose an average of 2.4 percent, with the Upper Midscale and Midscale sectors seeing remarkable increases of 11.1 percent and 8.9 percent, respectively.
As Oman continues to shape its future through targeted investment in the real estate market, the prospects for both local residents and international investors remain promising.