As per a report by the Central Bank of Oman, residential property prices inched by 7 per cent during 2022
The recent Financial Stability Report 2023 of the Central Bank of Oman (CBO) has underlined the resurgence of economic activities leading to a recovery in the real estate market and added that housing rents remain affordable due to abundant supply.
Reacting to the report, the Chairman of Syed Fayyaz Group (SFG), one of the leading real estate developers in Oman, Sheikh Fayyaz Ali Shah said, “Housing rents in Oman remain to be one of the most affordable given the quality of life the Sultanate of Oman offers. There has been an uptick in the demand but with large availability, the rents remain affordable.”
SFG has been developing and managing real estate in Oman since 1976. The group currently manages approximately 700 residential units in Muscat, along with various other types of properties. Shah said, “Rents in Muscat when compared to other cities in the region are much more affordable. Muscat provides greater opportunities for individuals to save money and maintain a positive work-life balance. Traditionally, real estate ownership has been an excellent platform to preserve wealth and generate cash flow. Although rents are considered affordable in Muscat, I find this to be reflected in the valuation of lands. Thus, as a real estate developer, I am very pleased with the returns that our rental portfolio generates.”
Shah said, “With a rise in population over the next decade, rents in Muscat will gradually increase. There has also been greater awareness of Oman across the globe as a peace-loving nation and we do get regular inquiries from overseas to settle or relocate in Muscat. I am grateful to His Majesty Sultan Haitham bin Tariq and the Government of Oman for shaping the country with its distinctive identity. Oman’s lifestyle remains truly unique, despite going through significant growth and diversification as we work towards Vision 2040.”
Another real estate developer of a leading gated community in Muscat said: “What the properties offer and the rent sought is very balanced and affordable when we compare to other major cities around the region. The return of expatriates’ workers after the pandemic was controlled has certainly played a significant role in our upward revision of rents. Still, the housing rents are far more affordable in Oman.”
The CBO report also attributed the rise in the expatriate population to pre-pandemic levels as one of the main reasons for the real estate recovery. The CBO noted, “The real estate market in Oman began to pick up in 2022 amid the improvement in economic conditions. The recent recovery in the population profile from the pandemic has eased some segments of the Omani real estate market, reviving the demand for real estate properties.”
It added, “The expatriate population, a major user of rental residential properties, rose by 8 per cent in 2022 compared to the beginning of the pandemic year 2020. The resumption of commercial activities after the pandemic and the increase in the number of Omanis joining the workforce has resulted in the recovery of economic activities, and rebooted the demand for property.”
As per the CBO estimates, residential property prices inched up on average by 7 per cent during 2022, with the residential real estate index recovering from its lows in 2021. “The resurgence of economic activities following the pandemic, coupled with favourable oil prices, has led to a gradual uptick in property prices. This can be attributed, to some extent, to a recovery in the labour market, where the demand for workers has increased, resulting in a higher number of expatriates employed in Oman,” added the CBO report. “However, despite these developments, housing rents still remain affordable due to abundant supply,” the central bank added.
The property transactions (value of the traded property) that experienced a sharp decline at the onset of the pandemic gradually recovered in the latter part of 2021, and this positive trend persisted throughout 2022, the CBO said.
