What's the property market outlook in Muscat?

Authored by the expert who managed and guided the team behind the Oman Property Pack

Yes, the analysis of Muscat's property market is included in our pack

Who is the author of this content?

SANDS OF WEALTH

A team specialized in real estate investing in MENA countries (Morocco, UAE, Oman, etc.)

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Muscat. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At Sands of Wealth, we explore the Omani real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Muscat, Salalah, and Nizwa. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What's the current trend in residential property prices in Muscat?

Residential property prices in Muscat are experiencing strong upward momentum as of September 2025.

Property prices jumped 7.3% year-on-year in Q1 2025, with apartment prices leading the surge at 17% growth. Villas saw a solid 6.4% increase, while residential land prices soared 17.4% in Muscat governorate. Urban renewal projects and government infrastructure developments are driving additional value increases in select neighborhoods.

Market forecasts indicate continued price appreciation of 3-7% for the full year 2025, with luxury properties and prime locations expected to outperform the market average. The strong price growth reflects robust demand from both domestic buyers and expatriate investors, supported by improved economic conditions and government initiatives under Vision 2040.

Central Muscat areas and Integrated Tourism Complexes are seeing the strongest price momentum, benefiting from infrastructure improvements and increased foreign investment accessibility. This upward trend positions Muscat as one of the more dynamic property markets in the Gulf region.

It's something we develop in our Oman property pack.

How have rental yields in Muscat changed over the past year?

Rental yields in Muscat have improved significantly over the past 12 months, making the city more attractive for buy-to-let investors.

Net rental yields on apartments now range from 3-5%, representing a meaningful increase from previous levels. Prime areas like Al Mouj have experienced particularly strong rental growth, with rents surging 10-20% in these sought-after locations. The combination of rising rents and relatively stable property prices has contributed to this yield improvement.

Villas continue to command higher occupancy rates at 87.5% compared to apartments at 80.8%, though both property types are benefiting from the overall market recovery. The robust occupancy levels across the residential sector support sustained rental income for property owners.

The rental market strength reflects growing expatriate presence, increased business activity, and limited quality rental stock in prime locations. This yield improvement trend is expected to continue through 2025 as Muscat's economy diversifies and attracts more international residents.

Foreign investors are particularly benefiting from these improved yields, especially in areas where freehold ownership is permitted under the expanded regulations.

What's the average time it takes to sell a property in Muscat right now?

The average time to complete a property sale in Muscat currently ranges from 30-60 days as of September 2025.

This relatively quick turnaround time reflects strong buyer demand and improved market liquidity compared to previous years. Properties in prime locations such as Al Mouj, Qurum, and Madinat Al Sultan Qaboos typically sell faster, often within the 30-45 day range, due to high investor and end-user interest.

The streamlined selling process benefits from improved government procedures and increased professional real estate services. Well-priced properties in desirable neighborhoods can attract multiple offers, particularly those meeting expatriate preferences for modern amenities and prime locations.

However, properties in less central areas or those requiring significant renovation may take closer to the 60-day mark or longer. The market's overall efficiency has improved significantly, with better financing options and clearer regulatory frameworks contributing to faster transactions.

This selling timeframe compares favorably to regional markets and reflects Muscat's growing appeal as a liquid real estate investment destination.

Are there specific neighborhoods in Muscat that are seeing stronger demand than others?

Several prime neighborhoods in Muscat are experiencing exceptionally strong demand, driven by luxury developments and expatriate preferences.

Neighborhood	Demand Level	Key Drivers
Al Mouj	Very High	Luxury marina development, freehold ownership, expatriate community
Qurum	Very High	Central location, business district proximity, established infrastructure
Madinat Al Sultan Qaboos	High	Government quarter, diplomatic area, premium residential zone
Muscat Bay	High	Integrated resort community, golf course, beachfront access
Sultan Haitham City	Emerging Strong	New mega-development, modern infrastructure, government backing
Al Khuwair	Moderate-High	Business district development, upcoming downtown project
Shatti Al Qurum	Moderate-High	Beachfront location, hotel zone, tourism infrastructure

How much new housing supply is coming onto the market in Muscat over the next 12 months?

Muscat will welcome approximately 5,500 new residential units in 2025, representing a steady but manageable increase in housing supply.

This new supply is part of Oman's broader development pipeline, which includes 62,800 new homes planned across the country by 2030. The majority of new units in Muscat are concentrated in planned developments and government-backed projects, rather than scattered individual constructions.

Key developments contributing to the new supply include phases of Sultan Haitham City, additional towers in Al Mouj, and various villa communities in emerging areas. The supply increase is designed to meet growing demand from both expatriate residents and local buyers upgrading their housing.

Despite this supply addition, demand fundamentals remain strong enough to absorb the new units without creating oversupply concerns in prime areas. However, secondary locations may experience more competitive pricing as new options become available.

The planned supply aligns with Oman's Vision 2040 objectives to provide quality housing while maintaining market stability and investment attractiveness.

What is the current occupancy rate for apartments and villas in Muscat?

The overall occupancy rate for residential properties in Muscat stands at a robust 85.2% as of September 2025.

Villas maintain higher occupancy rates at 87.5% compared to apartments at 80.8%, reflecting strong demand for larger family housing among both expatriate and local residents. These occupancy levels demonstrate healthy market fundamentals and sustained rental demand across property types.

The strong occupancy rates are supported by Oman's economic diversification efforts, which have attracted international businesses and their employees to Muscat. Government and semi-government organizations also contribute significantly to residential demand through their workforce housing needs.

Prime locations like Al Mouj, Qurum, and areas near business districts maintain even higher occupancy rates, often exceeding 90%. The consistent demand provides stability for property investors relying on rental income.

These occupancy levels compare favorably to regional markets and support the positive rental yield trends observed across Muscat's residential sector.

How are interest rates and mortgage availability affecting buyers in Muscat?

Mortgage conditions in Muscat remain relatively favorable for property buyers as of September 2025.

Average mortgage rates hover around 6.6% for a 30-year fixed loan in August 2025, representing stable borrowing costs that support continued buyer activity. Banks are maintaining good credit availability, with rising new loan issuance particularly for apartment purchases reflecting strong lender confidence in the market.

Government policies continue to support mortgage accessibility, with local banks offering competitive terms for both Omani nationals and qualified expatriate residents. The stable interest rate environment encourages buyers to proceed with purchases rather than waiting for better conditions.

Mortgage availability has improved compared to previous years, with banks showing increased willingness to finance properties in approved developments and ITC zones. This accessibility particularly benefits foreign buyers who previously faced more restrictive lending conditions.

The combination of reasonable rates and good availability is supporting transaction volumes and enabling more buyers to access the property market, contributing to the overall market momentum observed in 2025.

What are foreign ownership rules like in Muscat, and are they shifting in any way?

Foreign ownership rules in Muscat have expanded significantly, creating new opportunities for international property investors.

1. **Freehold ownership in Integrated Tourism Complexes (ITCs)** - Foreigners can purchase full ownership in designated tourism developments2. **Special Economic Zones (SEZs)** - New regulations from June 2025 allow freehold ownership in these designated areas3. **99-year usufruct rights** - Available for apartments outside ITCs, with inheritance and renewal rights for heirs4. **ITC zone expansion** - More areas being designated for foreign freehold ownership5. **Simplified procedures** - Streamlined registration and transfer processes for foreign buyers

These regulatory improvements represent a significant shift toward attracting foreign investment and diversifying the buyer base. The expansion of areas where foreigners can own property freehold has opened new neighborhoods previously inaccessible to international investors.

The 99-year usufruct option provides near-ownership benefits for properties outside designated zones, offering long-term security with inheritance rights. This flexibility makes Muscat more competitive with other Gulf markets for foreign investment.

It's something we develop in our Oman property pack.

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.

How are large infrastructure or government projects influencing property demand in Muscat?

Major infrastructure and government projects under Vision 2040 are significantly boosting property demand across Muscat.

Sultan Haitham City represents the largest development impact, creating a new urban center that's driving demand in surrounding areas and establishing new premium residential zones. The Al Khuwair Muscat Downtown project is transforming the business district, increasing demand for nearby residential properties among professionals and executives.

Transportation infrastructure improvements, including road networks and planned metro systems, are making previously less accessible areas more attractive to buyers. These connectivity projects are expanding the definition of prime locations beyond traditional central neighborhoods.

Government economic diversification initiatives are attracting international companies and their employees, creating sustained demand for quality residential properties. The focus on tourism, logistics, and technology sectors brings new demographic groups seeking different property types and locations.

These infrastructure investments provide long-term support for property values and rental demand, as they improve the overall livability and business appeal of Muscat as a regional hub.

What's the current level of transaction activity compared to the past few years in Muscat?

Transaction activity in Muscat's property market has reached impressive levels, with significant growth compared to recent years.

Property transactions reached RO 1.36 billion in value by June 2025, indicating strong market momentum and buyer confidence. This represents substantial growth from previous years when the market was recovering from economic challenges and lower oil prices.

The volume increase reflects both higher property values and increased transaction frequency, suggesting a healthy balance of supply and demand. Both local and foreign buyers are contributing to the activity surge, with expatriate purchases becoming more common following ownership rule expansions.

Investment transactions are particularly active in prime neighborhoods and new developments, while end-user purchases remain strong across various price segments. The government's economic policies and infrastructure investments are providing confidence that supports sustained transaction levels.

This activity level positions 2025 as one of the strongest years for Muscat's property market in recent history, with expectations for continued growth through the remainder of the year.

Are rental prices in Muscat moving in line with property prices, or diverging?

Rental prices in Muscat are rising in line with, and in some cases faster than, property purchase prices, creating favorable conditions for investors.

Central Muscat areas are seeing rental growth that matches or exceeds property price appreciation, supporting improved rental yields for investors. Areas like Al Mouj have experienced rental surges of 10-20%, which actually outpaces the general 7.3% property price growth, creating yield expansion opportunities.

This alignment between rental and purchase price growth indicates a balanced market where both end-users and investors can find value. The rental market strength is driven by increased expatriate presence, business expansion, and limited high-quality rental stock in preferred neighborhoods.

The parallel movement of rents and prices suggests sustainable market fundamentals rather than speculative bubbles. Property investors are benefiting from both capital appreciation and improving cash flow returns from their rental properties.

This trend supports the buy-to-let investment strategy, as properties can generate attractive yields while building long-term capital value in Muscat's evolving property landscape.

What are the main risks or downward pressures that could impact Muscat's property market outlook?

Several key risks could potentially challenge Muscat's current positive property market momentum.

1. **Oversupply in secondary locations** - New housing developments in less central areas may create competition and price pressure2. **Global interest rate increases** - Rising international rates could affect mortgage costs and buyer affordability3. **Foreign investment cooling** - Reduced international interest could impact demand in premium segments4. **Oil price volatility** - Economic dependence on energy sector makes the market sensitive to commodity fluctuations 5. **Policy uncertainty** - Potential changes to foreign ownership regulations could affect investor confidence

Lower liquidity compared to more established Gulf markets like Dubai and Abu Dhabi remains a structural challenge that could limit rapid price appreciation or exit strategies for investors. The market's smaller size means individual large transactions can have outsized impacts on local pricing trends.

Regional competition from other Gulf countries offering similar or better investment terms could divert foreign capital away from Muscat. Economic diversification efforts, while positive long-term, create uncertainty during the transition period away from oil dependency.

Investors should monitor these risk factors alongside the positive trends when making property investment decisions in Muscat's evolving market landscape.

It's something we develop in our Oman property pack.

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.

Sources

1. Arab News - Oman Real Estate Market
2. Sands of Wealth - Muscat Real Estate Market
3. Sands of Wealth - Muscat Real Estate Trends
4. Sands of Wealth - Muscat Property
5. Gulf News - Oman Real Estate Boom
6. LinkedIn - Oman Property Market Liberalization
7. Hamptons Oman Market Report
8. AirROI Muscat Market Analysis
9. Zawya - Muscat Property Market Growth
10. Tamimi & Company - Foreign Ownership Laws