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Muscat's residential property market is experiencing a solid recovery phase with moderate growth expectations.
Annual price growth has stabilized around 3-7% since 2022, supported by government infrastructure projects, foreign investment liberalization, and steady expatriate demand. The market shows balanced supply-demand dynamics with approximately 4,000-6,000 new units delivered annually.
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Muscat's property market shows steady recovery with 3-7% annual price growth since 2022, driven by infrastructure development and foreign investment.
The market maintains balanced supply levels with 4,000-6,000 annual unit deliveries, while rental yields range from 3-8% depending on property type and location.
| Market Indicator | Current Status (September 2025) | Forecast Trend |
|---|---|---|
| Annual Price Growth | 3-7% (Q1 2025: 7.3%) | 3-7% expected through 2027 |
| New Unit Supply | 4,000-6,000 units annually | Stable to slightly increasing |
| Rental Yields | Apartments: 3-5%, Villas: 4-6% | Stable in 3-8% range |
| Foreign Investment | Significant minority share | Growing due to Vision 2040 |
| Occupancy Rate | 75-80% range | Stable to improving |
| GDP Growth Impact | 2-3.5% annual GDP growth | Positive for real estate demand |
| Transaction Volume | 28.1% increase (Nov 2024) | Above five-year average |
What has been the annual price growth rate for residential properties in Muscat over the last five years?
Muscat's residential property market experienced a complete turnaround over the past five years.
Between 2018 and 2021, residential prices fell dramatically by up to 15% annually due to oil price volatility and economic uncertainty. However, since 2022, the market has recovered strongly with annual growth averaging between 3-7%.
As of September 2025, the latest data shows Q1 2025 delivered exceptional growth of 7.3% year-on-year, significantly outpacing 2024's more modest 3-4% average. Apartments in key districts jumped 17% while villas increased by 6.4%, indicating particularly strong demand in prime residential segments.
This recovery reflects improved economic fundamentals, government infrastructure investment, and renewed investor confidence in Oman's real estate sector.
It's something we develop in our Oman property pack.
How many new housing units are expected to be delivered in Muscat in the next 12-24 months?
Muscat's residential supply pipeline remains consistent with historical patterns, targeting 4,000-6,000 new units annually.
This delivery rate has been maintained over recent years and is expected to continue through 2026-2027. New developments increasingly feature sustainable design elements and smart home technology, reflecting changing buyer preferences and government environmental initiatives.
Government infrastructure projects and Vision 2040 policies suggest supply levels may trend toward the higher end of this range, potentially reaching 6,000+ units in peak years. The focus remains on quality developments rather than quantity, with developers emphasizing integrated communities and modern amenities.
This steady supply helps prevent both oversupply and severe shortages, contributing to market stability and moderate price appreciation.
What is the current average price per square meter for apartments and villas in Muscat?
| Property Type | Location Category | Price Range (OMR/sqm) | Price Range (USD/sqm) |
|---|---|---|---|
| Apartments | Average Districts | OMR 600-750 | USD 1,560-1,950 |
| Apartments | Prime Areas (Al Mouj) | OMR 1,000-1,200 | USD 2,080-2,600 |
| Villas | Average Districts | OMR 700-900 | USD 1,820-2,340 |
| Villas | Prime Areas (Al Mouj) | OMR 1,000-1,200 | USD 2,080-2,600 |
| Luxury Villas | Premium Locations | OMR 1,200+ | USD 2,600+ |
How have rental yields for apartments and villas changed in Muscat recently?
Rental yields in Muscat have stabilized within healthy investment ranges as of September 2025.
Apartments currently deliver gross rental yields of 3-5%, while villas typically achieve 4-6% annual returns. These figures represent a recovery from the lower yields experienced during the 2018-2021 downturn when oversupply compressed rental rates.
Prime areas like Al Mouj tend toward the lower end of yield ranges due to higher purchase prices, but offer better capital appreciation potential. Secondary districts provide higher yields but with potentially slower price growth.
The overall yield range of 3-8% across different property types and locations aligns with regional averages and remains attractive compared to traditional investment alternatives in Oman.
What is the current residential occupancy rate in Muscat?
Muscat's residential occupancy rate has recovered to pre-pandemic levels of 75-80% as of September 2025.
This represents a significant improvement from the occupancy challenges experienced during 2020-2021 when international travel restrictions and economic uncertainty reduced demand. Quality developments with modern amenities and sustainable features achieve occupancy rates at the higher end of this range.
Strong demand for well-located properties, particularly from expatriates and young Omani professionals, supports healthy occupancy levels. New developments in integrated communities and areas with good infrastructure connectivity perform particularly well.
The steady occupancy recovery indicates a balanced rental market without severe oversupply issues.
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How much foreign investment is entering Muscat's property market?
Foreign direct investment in Oman has surpassed OMR 25 billion, with a significant portion directed toward real estate development and acquisition.
While exact annual inflow figures for the property sector specifically aren't publicly detailed, foreign investment represents a substantial minority share of total property transactions in Muscat. This investment is particularly concentrated in Integrated Tourism Complexes (ITCs) and prime residential areas.
Vision 2040 liberalization policies have removed many restrictions on foreign property ownership, making Muscat increasingly attractive to international investors. Gulf investors, European buyers, and Asian investors form the primary foreign buyer segments.
The trend indicates growing international confidence in Oman's political stability and economic diversification efforts.
What is Oman's forecasted GDP growth rate for 2025-2027 and its impact on real estate?
Oman's GDP growth rate is projected at 2-3.5% annually for 2025-2027, driven by economic diversification and infrastructure investment.
This moderate but steady growth directly supports real estate demand in Muscat by creating employment opportunities, increasing household incomes, and attracting new residents. The diversification away from oil dependency strengthens long-term economic stability.
Infrastructure projects funded by this economic expansion generate construction jobs and improve connectivity, making previously secondary areas more attractive for residential development. Government spending on tourism and logistics sectors particularly benefits real estate markets.
Sustained GDP growth above 2% typically correlates with healthy residential property demand in emerging markets like Muscat.
It's something we develop in our Oman property pack.
How do current mortgage interest rates affect property buyer affordability in Muscat?
Mortgage interest rates in Oman have increased moderately since 2022-2023 following global rate hikes, but remain within manageable ranges for qualified buyers.
Current lending conditions are stricter than five years ago, with banks requiring higher down payments and more stringent income verification. This has somewhat reduced buyer affordability compared to the historically low-rate environment of 2019-2021.
However, new government policies aimed at supporting homeownership, particularly for Omani nationals, help balance accessibility concerns. Banks offer competitive packages for expatriate professionals in key sectors.
The moderate rate environment still supports healthy transaction volumes while preventing speculative bubbles that characterized some periods in the past.
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 government infrastructure and tourism projects will impact Muscat's property market?
Several major government projects are transforming Muscat's real estate landscape and creating substantial employment opportunities.
- Sultan Haitham City: Massive new city development project creating thousands of construction and permanent jobs
- Yiti Sustainable City: Eco-friendly integrated development emphasizing sustainability and modern living
- Muscat International Airport expansion: Increasing connectivity and supporting tourism sector growth
- Port Sultan Qaboos modernization: Logistics hub development generating commercial real estate demand
- Oman Rail project: Transportation infrastructure improving regional connectivity
These projects are estimated to generate several thousand new jobs over the next three years, directly increasing housing demand and supporting property values in connected areas.
How many property transactions occurred in Muscat over the last 12 months?
Muscat's property transaction volume surged by 28.1% year-on-year as of November 2024, indicating strong market recovery.
While exact transaction numbers aren't specified, this growth rate significantly exceeds the five-year average and reflects renewed buyer confidence. The increase spans both local and foreign buyers, with expatriate professionals and investors driving much of the activity.
Transaction volumes are now at or above pre-pandemic levels, suggesting the market has fully recovered from the 2020-2021 slowdown. High-quality developments and prime locations account for a disproportionate share of transaction value.
This transaction surge supports price growth and indicates healthy market liquidity for both buyers and sellers.
What percentage of current property demand comes from expatriates in Muscat?
Expatriates drive a substantial share of Muscat's residential property demand, particularly in mid-to-high-end segments and Integrated Tourism Complexes.
Their demand base has become increasingly stable due to Oman's liberalized visa policies and long-term residency programs introduced under Vision 2040. Professional expatriates in oil, gas, tourism, and financial services sectors form the core of this demand.
ITCs and premium developments specifically target international buyers, while mid-market rental properties serve the broader expatriate workforce. This diversified expatriate base reduces market volatility compared to markets dependent on single nationality groups.
Government policies promoting long-term residency and property ownership rights for foreigners strengthen this demand foundation for the coming years.
It's something we develop in our Oman property pack.
What do analysts forecast for Muscat's residential property prices over the next 3-5 years?
Leading real estate analysts project Muscat's residential property prices to maintain annual growth of 3-7% through 2030.
Prime locations including Al Mouj, Integrated Tourism Complexes, and areas near major infrastructure projects are expected to outpace broader market averages, potentially achieving 5%+ annual appreciation. Secondary districts may see more modest growth in the 2-4% range.
This forecast assumes continued economic diversification, stable government policies, and moderate oil price environments. Risks include global economic downturns or significant changes to expatriate employment policies.
The projection suggests Muscat will deliver steady, sustainable growth rather than dramatic booms or busts, making it suitable for both investment and end-user purchases.
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.
Muscat's property market presents a balanced investment opportunity with moderate growth prospects and stable fundamentals.
The combination of government infrastructure investment, foreign investment liberalization, and steady expatriate demand creates a supportive environment for both investors and end-users considering property purchases in Oman's capital.