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Everything you need to know before buying real estate is included in our Oman Property Pack
Oman's rental market offers attractive yields ranging from 5% to 8% for investors as of September 2025.
The Omani property market provides competitive returns compared to other Gulf cities, with apartments in Muscat's Integrated Tourism Complexes delivering the strongest performance and lowest vacancy rates. Expat demand drives consistent rental income, while new infrastructure projects support long-term growth prospects.
If you want to go deeper, you can check our pack of documents related to the real estate market in Oman, based on reliable facts and data, not opinions or rumors.
Oman rental yields range from 5-8% gross, with Muscat apartments performing best due to strong expat demand.
Property purchase costs include 3% registration fee and 1-2% legal fees, with no annual property taxes for individuals.
| Property Type | Muscat Yield (%) | Other Cities Yield (%) |
|---|---|---|
| Studio Apartment | 7-8% | 6-7% |
| 1-Bedroom Apartment | 6.5-7.5% | 5.5-6.5% |
| 2-Bedroom Apartment | 5.5-7% | 5-6% |
| 3-Bedroom Apartment | 4.5-6% | 4-5.5% |
| Townhouse/Villa | 4-6% | 4.5-5.5% |
| Luxury Villa | 4-5.5% | 3.5-5% |
| Short-term Rental | 6-9% | 5-7% |
How much do properties actually cost in Oman once you include all the fees and taxes?
Property purchase costs in Oman are transparent and relatively low compared to other Gulf countries.
The registration fee stands at 3% of the property value, paid by the buyer as a mandatory requirement for all property categories. Legal fees typically range from 1% to 2% of the property value for conveyancing and legal scrutiny services.
Oman does not impose annual property taxes or capital gains tax for individual property ownership, making it particularly attractive for investors. Agent commissions are typically 5% of the sale price, paid by the seller rather than the buyer.
Rental income is subject to a 3% municipal tax. Most developments, especially Integrated Tourism Complexes like Al Mouj Muscat and Muscat Hills, charge mandatory service and community fees ranging from OMR 40 to OMR 200 per month.
For a property priced at OMR 120,000 in Al Mouj Muscat, total purchase costs would include OMR 3,600 for registration, OMR 1,200 to OMR 2,400 for legal fees, and annual maintenance costs of OMR 480 to OMR 2,400.
What are the average rents by property type, like apartments, villas, and townhouses?
Rental prices in Oman vary significantly between Muscat's premium areas and other cities across the country.
| Property Type | Muscat ITCs (OMR/month) | Muscat City Average (OMR/month) | Other Cities (OMR/month) |
|---|---|---|---|
| Studio Apartment | 180-250 | 150-250 | 120-200 |
| 1-Bedroom Apartment | 350-1,385 | 197 | 130-200 |
| 2-Bedroom Apartment | 675-1,817 | 300-650 | 200-400 |
| 3-Bedroom Apartment | 800-1,700 | 450-900 | 250-400 |
| Townhouse/Villa (Mid-range) | 900-1,500 | 800-1,400 | 500-1,100 |
| Luxury Villa/Beachfront | 1,500-2,000 | 1,700-1,900 | 1,100-1,400 |
How do rental yields differ between Muscat and other major Omani cities?
Muscat consistently delivers the highest rental yields in Oman, particularly for apartment investments.
Muscat apartments generate gross yields between 6% and 9%, with city centre properties achieving closer to 8.5% and outskirt areas around 7%. Muscat villas and townhouses typically deliver gross yields of 4% to 6%, trending lower for luxury categories due to higher purchase prices.
Cities outside Muscat, including Salalah and Sohar, typically offer gross yields ranging from 5% to 7%. Salalah presents unique opportunities for higher seasonal yields during the Khareef tourism period when demand for short-term rentals peaks.
The yield differential reflects Muscat's stronger expat demand, superior infrastructure, and more developed rental market. Secondary cities offer lower entry costs but also face higher vacancy risks and more limited tenant pools.
It's something we develop in our Oman property pack.
What's the average yield by property size, say studios, 1-bedroom, 2-bedroom, and larger units?
Smaller properties consistently outperform larger units in terms of rental yields across Oman.
Studio apartments deliver the highest gross yields at 7% to 8%, with net yields of 5% to 6% after accounting for maintenance and vacancy costs. One-bedroom apartments follow closely with gross yields of 6.5% to 7.5% and net yields of 5.5% to 6%.
Two-bedroom apartments generate gross yields between 5.5% and 7%, with net yields of 4.5% to 5.5%. Three-bedroom units typically achieve gross yields of 4.5% to 6% and net yields of 4% to 5%.
Luxury villas represent the lowest-yielding category, delivering gross yields of 4% to 5.5% and net yields of 3% to 4.5%. The inverse relationship between property size and yield reflects stronger demand for smaller, more affordable rental units from the dominant expat tenant base.
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How do vacancy rates vary across areas and property types?
Vacancy rates in Oman vary significantly based on location, property type, and target tenant demographics.
Prime areas in Muscat, particularly quality Integrated Tourism Complex developments, maintain occupancy rates of approximately 85%. City-wide vacancy rates are slightly higher, with some secondary areas experiencing 15% to 20% vacancy rates.
Luxury and large units generally face higher vacancy periods, especially outside tourism seasons in secondary cities like Salalah. Apartments targeting expat families and professionals experience the lowest vacancy rates due to robust and consistent demand.
Properties near universities, such as those around Sultan Qaboos University, benefit from student demand but may experience seasonal fluctuations aligned with academic calendars. The overall rental market remains healthy, with quality properties in prime locations rarely experiencing extended vacancy periods.
Who are the typical renters in Oman—locals, expats, short-term visitors?
The Omani rental market is dominated by expatriate tenants, particularly in Muscat and industrial cities.
Expats working in the private sector, including families and professionals, represent the primary rental demographic in Muscat and Sohar. These tenants typically seek quality apartments and villas with modern amenities and prefer locations within Integrated Tourism Complexes or well-established neighborhoods.
Local Omani citizens predominantly own their properties and constitute a minimal portion of the long-term rental market. Short-term visitors, including business travelers and tourists, drive demand for hotels, serviced apartments, and Airbnb properties, particularly in Muscat and Salalah.
University students create localized rental demand near educational institutions, particularly around Sultan Qaboos University. The expatriate population has grown by 33% in recent years, strengthening rental demand and supporting yield growth across the country.
What's the difference in returns between renting long-term and renting short-term, like on Airbnb?
Short-term rental strategies can generate higher returns than traditional long-term leasing, but require more active management.
Airbnb properties in Muscat achieve a median annual revenue of $7,207 with 36% occupancy rates and an average daily rate of approximately $80 (OMR 30). Top-performing properties generate over $2,266 per month (OMR 872), significantly exceeding typical long-term rental rates.
Short-term rental yields can eclipse traditional annual lease performance when occupancy rates are high and properties are professionally managed. However, success depends heavily on location, property quality, and marketing effectiveness.
Long-term leasing offers safer and steadier yields of 5% to 7% with reduced seasonal risk and management burden. Professional expat tenants and families particularly favor long-term arrangements, providing consistent rental income with lower vacancy periods and operational complexity.
It's something we develop in our Oman property pack.
Can you give me concrete examples of rental prices and yields for different property categories?
Real market examples from September 2025 demonstrate the range of investment opportunities across Oman's property market.
A 2-bedroom apartment in Al Mouj Muscat purchased for OMR 150,000 and renting for OMR 675 per month generates a gross yield of 5.4%. This represents a typical mid-range investment in Muscat's premium integrated development.
A 1-bedroom unit in Jebel Sifah purchased for $115,000 and renting for $700 to $900 per month achieves approximately 7% gross yield. This coastal development attracts both long-term expat tenants and short-term vacation renters.
A 2-bedroom apartment in Muscat Hills renting for OMR 1,235 per month with a purchase price of OMR 120,000 delivers approximately 7% gross yield. These examples illustrate the performance range across different Muscat developments and price points.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Oman versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What have been the changes in rents and yields compared to five years ago, and compared to last year?
The Omani property market has experienced significant recovery and growth following the 2020-2021 downturn.
Between 2020 and 2021, both property prices and rental rates declined by up to 30% due to market stagnation and economic uncertainty. However, the market has rebounded strongly from 2022 to 2025, with prices and rents increasing by 7% to 17% annually, particularly in prime Muscat locations.
Yields have improved by 10% to 20% in top areas over this period, driven by a surge in expat population growth of 33% and increased investment in infrastructure and tourism. The recovery has been most pronounced in Integrated Tourism Complexes and areas with strong expat appeal.
Comparing 2024 to 2025, Muscat yields have remained stable or increased by 1% to 2%. Rental rates in ITCs have risen by 10% to 20%, while other areas have remained generally stable, reflecting the continued strength of premium market segments.
What's the forecast for rental yields in Oman for one year, five years, and ten years out?
The outlook for Omani rental yields remains positive across all timeframes, supported by demographic and economic trends.
Over the next year, yields are expected to remain stable with potential increases of 1% to 2% in Muscat and emerging areas. This growth will be driven by continued expat demand, tourism development, and new infrastructure projects enhancing property accessibility and appeal.
The five-year forecast shows moderately positive prospects, particularly for Muscat, Sohar, and Salalah. Government reforms, tourism initiatives, and population growth support sustainable yield growth, though potential risks include future tax policy changes or market oversupply in certain segments.
Ten-year projections suggest sustainable yields in the 5% to 7% range for high-demand areas, assuming continued economic reforms and population growth. However, uncertainty increases for luxury properties and regions facing potential oversupply, making location and property type selection crucial for long-term success.
Which property types or locations look like the smartest investment choices right now?
Several property categories and locations offer superior investment potential in the current Omani market as of September 2025.
1. **Muscat Integrated Tourism Complexes (Al Mouj, Muscat Hills)** - These developments offer the safest investments with highest demand, robust expat tenancy, and steady yields of 6% to 8%.2. **Sohar industrial area properties** - Rising yields driven by logistics and port-related economic growth, benefiting from Oman's industrial diversification strategy.3. **Salalah tourism properties** - Strong seasonal short-term rental performance with longer-term growth potential as tourism infrastructure develops.4. **One to two-bedroom apartments** - These units deliver the highest yields, lowest vacancies, and broadest tenant base across all major cities.5. **Properties near major employers and universities** - Consistent rental demand from expat workers and students provides stable income streams.Investors should avoid high-end luxury villas unless targeting specialized rental markets, as these properties typically deliver lower yields and face higher vacancy risks.
It's something we develop in our Oman property pack.
How do Omani rental yields compare with other similar big cities in the region or globally?
Oman currently ranks among the best rental yield performers in the Gulf region and compares favorably to global markets.
| City/Country | Typical Gross Yield (%) | Market Characteristics |
|---|---|---|
| Oman | 5-8% | Strong expat demand, low taxes |
| Dubai, UAE | 5-6% | Mature market, high competition |
| Abu Dhabi, UAE | 5-6% | Government worker demand |
| Doha, Qatar | 4-6% | World Cup infrastructure boost |
| Riyadh, Saudi Arabia | 3-5% | Vision 2030 development |
| Istanbul, Turkey | 3.5-5.5% | Currency volatility impact |
| London, UK | 3-4% | Mature, expensive market |
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Oman's rental market offers compelling opportunities for investors seeking stable yields in the Gulf region.
With competitive returns, low taxes, and strong expat demand, the country presents attractive investment prospects for both short-term and long-term strategies.
Sources
- Sands of Wealth - Moving to Oman to Buy Property
- Nevestate - Property Taxes UAE Oman Saudi Arabia
- LinkedIn - Oman Property Market Liberalization
- Fly Homes - Cost of Living in Oman
- Tranio - Oman Property Investment
- MEED - Residential Real Estate Market in Oman
- Sands of Wealth - Oman Price Forecasts
- Sands of Wealth - Muscat Real Estate Market
- Imtilak - Are Properties in Oman Profitable
- Omnia Capital Group - Property Investment Oman