Market Overview
Oman’s real estate sector has stabilised following the post-2015 correction, with transaction volumes increasing 18% year-on-year in 2024. The market is segmented between Integrated Tourism Complexes (ITCs) that permit foreign freehold ownership, commercial developments, and the domestic residential market.
Muscat remains the primary market, with emerging activity in Salalah, Sohar, and the Duqm special economic zone. Rental yields for commercial property average 7-9%, while ITC residential units offer 5-7% gross yields.
Opportunity Assessment
ITC developments including The Wave, Muscat Hills, and Al Mouj offer the most accessible entry point for foreign investors. Commercial office space in Muscat’s CBD is experiencing tight supply, with Grade A vacancy rates below 5%. Tourism-linked hospitality real estate benefits from growing visitor numbers.
| Metric | Value |
|---|---|
| Transaction volume growth | 18% YoY (2024) |
| Commercial rental yield | 7-9% gross |
| ITC residential yield | 5-7% gross |
| Grade A vacancy (Muscat) | Below 5% |
| Foreign ownership zones | 8 ITCs operational |
| Mortgage rate range | 4.5-6.5% |
Risk Factors
Oversupply risk exists in mid-range residential segments. Foreign ownership is restricted to designated ITC areas. Property registration and legal frameworks differ from common-law jurisdictions, requiring local legal counsel.
Entry Strategy
ITC freehold purchases offer the simplest structure for individual and institutional investors. Commercial property investment benefits from local partnership structures. REITs are emerging as a vehicle on the Muscat Securities Market.
Vision 2040 Alignment
Urban development and housing are addressed under Vision 2040 Pillar 4 (Governance and Institutional Performance), with the National Spatial Strategy guiding development corridors and investment zones across all governorates.