Oman Residential Real Estate Market Research Report: Forecast (2024-2030)

Market Definition

Residential real estate encompasses properties designed primarily for housing individuals, families, or groups. This sector includes a range of housing types, such as single-family homes, apartments, condominiums, and townhouses. These properties are distinct from commercial or industrial real estate, serving as the primary living spaces for residents rather than for business or manufacturing purposes.

Market Insights & Analysis: Oman Residential Real Estate Market (2024-30):

The Oman Residential Real Estate Market size is estimated to grow at a CAGR of around 9.8% during the forecast period, i.e., 2024-30. The Oman Residential Real Estate Market has been experiencing significant growth, specifically driven by the rising expat populations across the country. Despite the challenges posed by economic shifts and nationalization efforts in white-collar jobs, the market has been showing promising signs of adjustment and opportunity, particularly in affordable housing sectors and premium residential areas.

Further, as expatriate numbers stabilized, there has been a noticeable increase in demand for residential properties, with a focus shifting towards more affordable housing in areas such as Al Mouj, Muscat Hills, and Shatti Al Qurum. This shift has been coupled with a rise in the construction of residential units, predominantly apartments, aimed at the rental market. These developments, which typically offer moderate- to high-quality amenities, are meeting a growing demand for value-driven housing options. As a result, the rental market is beginning to stabilize in Oman, with some areas seeing a modest increase in rental values, which has been contributing to market growth & expansion.

Moreover, premium segments like high-end villas in Al Mouj and Muscat Hills continue to attract interest, maintaining stable market growth & development with slight increases in rental values. Thus, the gradual inclination toward the high-end market segment demonstrates the enduring appeal of quality living spaces in Oman, suggesting a robust potential for growth and investment in the nation’s residential real estate sector. These developments indicate a market that is dynamically adjusting to meet the needs of both expatriates and residents, presenting opportunities for sustained growth and stability in the coming years.

Oman Residential Real Estate Market Driver:

Strategic Developments Enhancing Urban Living Propel the Oman Residential Real Estate Market – There has been a noticeable surge in the number of expatriates in Muscat, which has significantly increased the demand for rental accommodations. This shift has particularly highlighted the desirability of well-managed residential communities, known for their quality properties, professional management, and comprehensive amenities including retail, food & beverage outlets, and leisure facilities, making them top choices in the city. Further, in tandem with this growing demand, Oman has initiated several large-scale integrated housing projects. These developments are designed to offer mixed-use residential areas that comprehensively cater to the needs of their residents. For instance,

• In 2024, the Oman government announced its plans for a USD 2.4 billion Omani Mountain Destination project in Jabal al Akhdar. The project is in alignment with Oman Vision 2040, which would include residences, hotels, and a health village.

Hence, these efforts would allow the country to reduce the supply-demand gap in the residential real estate sector, specifically in urban areas. These efforts also showcase Oman's proactive approach to urban development, ensuring high-quality living spaces within vibrant, fully integrated communities, catering to both local citizens and the growing expatriate community. Thus, the upcoming projects would further augment the size & volume of the Oman Residential Real Estate Market during the forecast period.

Oman Residential Real Estate Market Opportunity:

The Rise of Smart Home Investments Offers Lucrative Market Opportunities – A specific opportunity in the Oman Real Estate Market arises from the potential to develop smart housing solutions. As Muscat and other cities in Oman continue to attract a growing expatriate workforce, there is a clear demand for high-tech, connected residential units that offer advanced home automation systems. These systems would include smart energy management, security enhancements, and integrated home appliances that can be controlled via smartphones or other devices.

In addition, the government of Oman is also focusing on the development of smart home spaces across the country. This has led real estate developers to introduce their smart home projects in the coming years to leverage this upcoming opportunity. For instance,

• In 2024, Al Faiha Development Company unveiled the Smart Home project in Al Ghala Heights. The project offers cutting-edge smart features in residential units, including remote control via mobile devices and AI-driven services like childcare, laundry, and a private cinema.

Thus, by investing in smart home technology and infrastructure, developers in Oman would cater to a tech-savvy population that values convenience, efficiency, and security. This approach would not only help in meeting market demand but would also enhance the attractiveness of the Oman Real Estate Market in the coming years.

Oman Residential Real Estate Market Challenge:

Risks of Oversupply in the Oman Residential Real Estate Market Impeding Market Growth – A specific challenge facing the Oman Real Estate Market has been the potential oversupply of residential units, particularly in light of the numerous large-scale housing projects currently underway across various regions. This surge in construction activity initially intended to accommodate a growing population and expatriate workforce, risks leading to an imbalance where the supply of new housing outstrips actual demand. Further, specifically during 2019-2021, when the country faced significant economic challenges, the per-capita income of consumers also decreased. This has also affected the demand for new residential units during the historical years, leading to several residential units remaining unoccupied in areas like Muscat. This oversupply has resulted in lower occupancy rates and a decline in rental yields, which has ultimately impacted the profitability of real estate investments. Thus, the Oman Residential Real Estate Market has been negatively affected during the historical years.

Additionally, an excess of available properties would dampen future development incentives and decrease property values, presenting a significant hurdle for both developers and investors in the sector. Addressing this challenge requires strategic planning, market analysis, and potentially slowing down or reevaluating development plans to better align with actual market needs and absorption rates.

Oman Residential Real Estate Market Trend:

Increasing Focus on Sustainability & Eco-Friendly Building Practices – A prominent market trend that has been shaping the Oman Real Estate Market is the growing focus on sustainability and eco-friendly building practices. This shift has been driven by increasing environmental awareness and the global push towards reducing carbon footprints. Also, in recent years, the government of Oman has been making efforts to reduce carbon emissions across the construction market, both in residential and commercial spaces. In response to this, residential real estate developers in Oman have been integrating green technologies and sustainable materials into new construction projects. Some of the most commonly used technologies for eco-friendly development include solar panels, energy-efficient appliances, and water-saving fixtures in residential projects.

Additionally, companies are also focusing on designs that optimize natural light and airflow to reduce electricity use. Hence, such sustainable development plans largely appeal to environmentally conscious buyers, as they also offer long-term cost savings. Thus, the demand for sustainable living spaces in the residential segment is projected to escalate in the coming years as well.

Oman Residential Real Estate Market (2024-30): Segmentation Analysis

The Oman Residential Real Estate Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the national level. According to the market analysis, the market has been further classified as:

Based on Type

• Apartments and Condominiums
• Villas and Landed Houses

In Oman's urban centers like Muscat, apartments, and condominiums have experienced a substantial increase in demand, a trend largely driven by rapid urbanization and the influx of expatriates. These groups have been observed to often seek practical and accessible living options that are close to their workplace and have essential services and leisure activities. The appeal of the apartment segment has been further enhanced by the development of mixed-use projects in Oman that blend residential units with retail, dining, and office spaces, offering a convenient and compact lifestyle that meets the needs of residents in rapidly modernizing cities.

Additionally, the development of apartment complexes is a strategic response to the challenges of land scarcity in urban areas, promoting more efficient use of space through vertical construction. This approach is supported by the government's focus on enhancing urban infrastructure, such as transportation and utilities, which are critical growth drivers that make high-density living more viable and sustainable. Also, these apartments in Oman are largely equipped with modern amenities like security systems, gyms, and communal spaces, which largely attract tenants. Hence, with the increasing availability of apartments in Oman and their efficient services, their demand is projected to improve in the forecasted years as well.

Oman Residential Real Estate Market (2024-30): Regional Projections

• North
• Central
• South

The North region, led predominantly by Muscat, held a considerable market share in the Oman Residential Real Estate Market, especially within the luxury and high-end residential segments. Muscat’s allure as a top destination for real estate investment has been bolstered by its well-developed infrastructure and strategic economic initiatives that appeal to both residents and expatriates. Also, high-profile developments in this region showcase its ability to maintain demand for high-end living amidst wider economic pressures. Thus, the consistent expansion of luxury residential projects, supported by government efforts to promote luxury experiences and upscale living, has supported the growth of the residential real estate market in this region.

Additionally, the northern region’s real estate market is anticipated to be further enhanced by advantageous policies such as the usufruct system, which boosts foreign investment by permitting expatriates to own property under favorable conditions. This policy has triggered a rapid increase in the demand for residential properties, particularly apartments and luxury villas. It has also led to the frequent introduction of new projects across the region, as seen with projects like Murooj Lanes, which are driving real estate development and setting market trends in Oman. Thus, as more residential projects come up in the northern region, it would experience growth in the coming years as well.

Oman Residential Real Estate Industry Recent Development:

• 2023: Al Mouj Muscat, a collaboration between Majid Al Futtaim Properties of the UAE and Oman Tourism Development Company (OMRAN), together with Tanmia Oman (Oman National Investments Development Company), has introduced Jinan Island. This exclusive enclave comprises 43 luxurious villas, each boasting five to six bedrooms and situated amidst a serene lake and expansive parkland.
• 2023: Orascom Development Holding AG, an internationally acclaimed developer, has partnered through its subsidiary, Muriya, with OMRAN, the leading governmental arm for tourism development in Oman, to launch Amazi. This new and highly sought-after waterfront residential resort is situated in Hawana Salalah and was designed by the esteemed SB Architects.

Gain a Competitive Edge with Our Oman Residential Real Estate Market Report

1. Oman Residential Real Estate Market Report by Markntel Advisors provides a detailed & thorough analysis of market size, growth rate, competitive landscape, and key players. This comprehensive market analysis helps businesses gain a holistic understanding of market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
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