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Oman: Real Estate Rising

July 17, 2012 07:30

OMAN’S real estate sector is gathering momentum, with economic confidence driving higher domestic sales and amended property ownership rules drawing increased interest from foreign investors.


Some RO1.3bn ($3.4bn) worth of property transactions were registered in the first nine months of this year, compared to RO1.1bn ($3.1bn) in the whole of 2009, according to data released by the Ministry of Housing.

Ownership deals by GCC citizens also grew by 40.7 per cent to 2300 in the first six months of 2010 while some 5800 mortgage contracts were signed with a total value of RO698m ($1.8bn).

Meanwhile, a report by the hospitality research group PKF Consulting released in October noted growing interest in residential units located in integrated tourism complexes (ITCs) spread along the country’s coast. ITCs are the easiest avenue for foreign nationals looking to enter the local property market.

Oman has largely opened up its real estate sector to foreign investors in the last decade, with the first major step a 2002 decision to grant GCC nationals the right to own property for residential or investment purposes.

This was followed in 2006 with legislation allowing foreigners of other nationalities to directly own property within ITCs.


Amendments to Omani land use laws issued by Royal Decree in September relaxed foreign shareholding restrictions, enabling public and closed joint stock companies with a minimum of 30 per cent Omani shareholding to own land.


Significantly, the amendments allow these companies to engage in real estate development as a business object, a permission that was previously restricted to 100 per cent Omani and later 100 per cent GCC owned companies.


This further opening up of the sector could add impetus to the market, which is already seeing growth due to domestic demand fuelled by economic growth and a young population. Speaking at a recent property financing expo held by BankMuscat, Tyler Scott, a senior manager for sales and leasing with real estate brokers Engel and Volkers, said buyer confidence was returning and interest in a broad range of products was on the rise.


“The Omani real estate market is quite distinct and quite characteristic of the country,” he said. “The property market has witnessed big adjustments and is presently enjoying good support.”


While there were concerns that a big budget infrastructure programme launched by the state would divert construction capacity away from residential projects, the projects are unlikely to make long-term bottlenecks in supply, leaving the market free to build on its strong foundations.


In the meantime, the government’s plans to boost transport and housing infrastructure under its “Vision 2020” programme have led to growing interest in the construction sector. The industry is valued at $3.7bn this year and should register growth rates of around 5 per cent in the next three years, according to the “Oman Infrastructure Report Q4 2010”, published in November by companiesandmarkets.com.

nOxford Business Group (OBG) is a global publishing, research and consultancy firm. OBG publishes economic and political intelligence on the markets of the Middle East, Eastern Europe, Africa, and Asia. Through its range of print and online products, OBG offers comprehensive and accurate analysis of political, macroeconomic and sectoral developments, including banking, capital markets, energy, infrastructure, industry and insurance.


Written by a team of seasoned analysts, based on the ground for six months, the critically acclaimed series of economic, political and business reports have become the leading source of intelligence on the rapidly developing countries in the regions they cover.


OBG’s online economic briefings provide up-to-date in-depth analysis on the issues that matter for thousands of subscribers worldwide. OBG’s consultancy arm offers tailor-made market intelligence and advice to firms currently operating in these markets and those looking to enter them.


In Oman, OBG has a Capital Market partnership with Al Madina Financial & Investment Services Co, Legal Analysis partnership with Al Busaidy Mansoor Jamal & Co, and an Accountancy Partnership with Abu Timam Grant Thornton.


~~~Source: http://main.omanobserver.om/node/31110

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