Oman’s residential real estate market has witnessed a significant surge, with residential land prices leading the way. According to the National Center for Statistics and Information (NCSI), the overall real estate index experienced a 2.5 percent increase in the third quarter of 2023.
Data released by the NCSI revealed a 7.1 percent growth in the residential land price index. However, the index for residential apartment prices saw a decline of 9.1 percent, while villa prices experienced a decrease of 2.6 percent. Other homes recorded a significant decline of 15.3 percent.
Compared to the second quarter of 2023, the general residential real estate price index showed a decrease of 3.8 percent. Specifically, the residential land price index recorded a 4.3 percent decrease during this period.
A report by global real estate services provider Savills highlighted the incremental demand for rental properties in Muscat, driven by the steady growth in the expatriate population. This increased demand relative to supply has led to a decrease in the number of available residential units for rent.
Savills also noted the introduction of lower-grade residential units, particularly apartments, into the rental market, resulting in an oversupply. However, the supply of higher-grade properties in established localities or larger projects, offering a more integrated lifestyle, has become increasingly limited compared to the growing demand from the expanding expatriate population.
While the supply of new developments in Muscat remains stable, the introduction of new projects has slowed down. Demand for office space in Muscat is moderate, with a preference for smaller office spaces, while larger spaces face limited demand.
Savills identified areas like Al Mouj as highly sought after due to the quality of properties, professional property management, a variety of retail and food and beverage outlets, and a diverse range of leisure facilities.
The report also highlighted the positive changes in Oman’s economy over the past two years, attributed to the increase in commodity prices. In September, Oman experienced a 1.3 percent inflation surge, primarily driven by increases in food and beverage prices. However, the inflation rate in October remained lower at 2.4 percent compared to September 2022.
The consumer price index reflected upward trends in various categories, particularly in the food and non-alcoholic beverages subgroup, which saw a 3.4 percent increase compared to the same period in the previous year.