The Housing Challenge
Housing affordability has emerged as one of the most pressing social issues facing young Omanis. The traditional model – government-allocated land and housing loans through the Oman Housing Bank – cannot keep pace with demand from a young, growing population forming new households. Land prices in urban areas, particularly Muscat, have risen significantly. Construction costs have increased. The gap between available income (especially for young private-sector workers) and the cost of adequate housing is widening, creating social frustration and delaying family formation.
Demand Pressures
Several factors drive housing demand: Oman’s young demographic profile means large cohorts are reaching household-formation age annually; urbanisation continues as rural populations migrate to Muscat and secondary cities; cultural expectations of home ownership (rather than long-term renting) create strong purchase demand; and nuclear family formation is replacing extended family living arrangements, increasing the number of housing units needed. The Royal Housing Programme provides some supply, but waiting lists are long and allocation processes are opaque.
Supply Constraints
Housing supply faces multiple constraints: limited availability of serviced land in desirable locations; high construction costs driven partly by building material imports; infrastructure deficits (roads, utilities, schools, healthcare) in potential development areas; limited private developer activity at affordable price points; and financing constraints for both developers and buyers. The mortgage market, while growing, offers terms that many young Omanis – particularly those on private-sector salaries – find unaffordable. The Oman Housing Bank’s capacity is limited relative to demand.
Policy Options
Addressing the housing crisis requires a multi-faceted approach: releasing more government-owned land for residential development with infrastructure investment; supporting public-private partnerships for affordable housing projects; reforming the mortgage market with longer terms and shared-equity models; developing secondary cities and new urban centres to reduce pressure on Muscat; modernising the social housing allocation system for transparency and efficiency; and exploring innovative construction methods (modular, 3D printing) to reduce costs. Housing affordability is not just an economic issue – it is a social stability imperative.