Authored by the expert who managed and guided the team behind the Oman Property Pack
Everything you need to know before buying real estate is included in our Oman Property Pack
Are you considering investing in Oman’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Lease land for up to 99 years in Oman, as outright ownership isn’t allowed for foreigners
In Oman, foreigners can't own land outright, but they can lease it for up to 99 years.
Oman's government owns all the land, as per Sultani Decree 5 of 1980, with a few exceptions for inheritance and specific real estate projects. To attract foreign investment, Oman allows property ownership in designated areas called Integrated Tourism Complexes (ITCs). These include popular spots like The Wave Muscat and Jebel Sifah, where foreigners can buy and own 100% of their plots under usufruct rights, which are essentially long-term leases.
In 2023, the Omani government announced that foreigners would be granted 99-year usufruct rights to own properties in new future cities, such as Sultan Haitham City. This move is part of a broader strategy to make Oman an attractive destination for foreign investors by offering long-term security and control over their investments.
These ITCs are not just about owning property; they offer a lifestyle with amenities like golf courses, marinas, and luxury hotels. This makes them appealing for those looking to invest in a vacation home or a rental property. The idea is to create a community where everything you need is within reach, enhancing the appeal for potential buyers.
Oman's approach is unique in the region, as it balances between maintaining national control over land and encouraging foreign investment. This strategy is particularly appealing to investors from countries with strong ties to Oman, such as the UK and India, who are looking for stable and secure investment opportunities.
For those considering investing in Oman, understanding the local real estate market and the specific regulations is crucial. Engaging with local experts or real estate agents familiar with the Omani market can provide valuable insights and help navigate the process smoothly.
Sources: Oman Licenses, Tamimi, Invest Royal
2) Focus on Integrated Tourism Complexes in Oman, as foreigners can only buy property there, offering limited options but high-quality amenities
In Oman, foreigners can only buy property in designated Integrated Tourism Complexes (ITCs).
These ITCs are special zones where foreigners can purchase property, designed to attract both local and international buyers. Some popular ITCs include Al Mouj Muscat, Shangri-La’s Barr Al Jissah Resort and Spa, and Muscat Hills. These places offer full ownership rights to foreign buyers, which is a big plus.
The main reason foreigners are limited to ITCs is because these areas offer high-quality amenities and services. For example, Al Mouj Muscat and Shangri-La’s Barr Al Jissah Resort and Spa are famous for their luxurious facilities, like golf courses, marinas, and shopping centers. This makes them very appealing to foreign buyers seeking a unique and upscale living environment.
Living in an ITC means you get access to exclusive amenities that aren't available elsewhere. Imagine having a marina at your doorstep or a world-class golf course just a short walk away. These features make ITCs a top choice for those looking to invest in Oman's real estate market.
While the options might seem limited, the quality of life in these complexes is unmatched. ITCs are designed to offer a lifestyle that combines luxury with convenience, making them a preferred choice for many international buyers.
So, if you're considering buying property in Oman, ITCs are your go-to option. They not only provide a secure investment but also a chance to enjoy a premium lifestyle. These complexes are a gateway to experiencing the best of what Oman has to offer.
Sources: Oman Licenses, Aparthotel, Arab MLS
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.
3) Consider utility costs in Oman, as air conditioning and water desalination can make them higher than expected
When considering a move to Oman, it's important to factor in the high cost of utilities.
Oman's climate has been getting hotter, with average temperatures rising over the years. This makes air conditioning a must-have, especially during the scorching summer months. As a result, electricity usage tends to skyrocket during this time, leading to hefty utility bills.
Water is another big concern in Oman. The country is among the most water-stressed in the world, heavily relying on desalination plants for its water supply. These plants are expensive to run, and this cost is passed on to residents through higher water bills.
Given these factors, it's crucial to plan your budget carefully when it comes to utilities in Oman. The need for air conditioning and desalinated water can make living costs higher than you might expect.
Insider tip: some areas offer subsidies or sustainable solutions to help manage these costs, so it's worth looking into local programs that might ease the financial burden.
Understanding these elements can help you make a more informed decision about living in Oman, ensuring you're prepared for the financial aspects of daily life there.
Sources: IEA Report, Oman Observer, Oman PWP
4) Consider eco-friendly properties in Oman, as they attract environmentally conscious buyers and are gaining popularity
Eco-friendly and sustainable properties are becoming increasingly popular in the real estate market.
In places like Oman, projects such as The Sustainable City - Yiti are gaining significant traction. The first phase of this project sold out completely, and the second phase is also experiencing strong sales. This shows a growing demand for sustainable living options among buyers who are keen on reducing their environmental impact.
One reason for this shift is the rising awareness of the environmental impact of traditional construction methods. These methods contribute significantly to greenhouse gas emissions, while sustainable construction offers substantial savings in energy, water, and materials. The Sustainable City - Yiti, for example, aims to reduce the carbon footprint of its residents by 78% compared to conventional housing.
The media has played a crucial role in highlighting the benefits of eco-friendly homes. Projects like The Sustainable City - Yiti have received extensive coverage, emphasizing advantages such as lower utility bills and zero maintenance fees. This media attention helps raise awareness and attracts environmentally conscious buyers who are increasingly looking for properties that align with their values.
Investing in these properties can attract a growing segment of environmentally conscious buyers. You might be surprised to find that eco-friendly homes are not just a trend but a smart investment for the future. As more people become aware of the benefits, the demand for such properties is expected to rise.
In Oman, the push for sustainable living is not just about individual projects but part of a larger movement towards greener construction practices. Green Build Oman 2024 is set to showcase innovations in this field, further boosting interest and investment in sustainable real estate.
Sources: The Sustainable City - Yiti, Green Construction in Oman, Green Build Oman 2024
5) Consider short-term rental properties in high-tourist areas to capitalize on the growing tourism trend
Oman's tourism industry is booming, making it a great time to invest in short-term rental properties.
In 2023, tourism in Oman contributed RO2.8 billion to the GDP, a significant 35% increase from the previous year. This upward trend is expected to continue, with projections showing a contribution of RO3.3 billion in 2024, which will account for about 7.6% of the GDP. This growth is largely driven by the country's stunning landscapes, rich culture, and strategic location, attracting more visitors each year.
Oman's airports have experienced a 12% increase in passenger traffic in the first half of 2024, signaling a surge in tourist arrivals. This influx is mirrored in the hotel industry, where revenues for three to five-star hotels rose by 8.6%, and hotel guests increased by 10.7%. This trend suggests that short-term rentals, especially in high-traffic tourist areas, could enjoy higher occupancy rates.
The Omran Group, tasked with executing the 2040 National Tourism Strategy, reported a 199% increase in net profit in 2023 compared to the previous year. Their revenue also grew by 44.6%, underscoring the thriving tourism sector. This success is part of the broader Oman Vision 2040 plan, which includes a US$3 billion investment in tourism infrastructure, ensuring continued growth and development.
With the government's commitment to enhancing tourism infrastructure and the rising number of visitors, investing in short-term rentals in Oman could be a lucrative opportunity. The country's diverse attractions, from pristine beaches to historic forts, continue to draw tourists, making it an ideal market for property investment.
Sources: AGBI, Enso Connect, IFP Info
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6) Focus on Muscat properties for higher profits, as it’s the most developed and popular area for expats and tourists
Investing in Muscat's property market is a smart move because it's the most developed and sought-after area for expatriates and tourists.
Muscat's rental market is booming, thanks to a growing expatriate population and a steady stream of tourists. The city's residential real estate market is expected to grow significantly, with projections showing an increase from USD 4.38 billion in 2024 to USD 6.80 billion by 2029. This means more people are looking for places to live, making it a great time to invest.
Tourism is another big driver, with visitor numbers expected to grow by 24.7% year-on-year in 2024, reaching 5.3 million. This influx of tourists is boosting demand for short-term rentals, offering property investors a lucrative opportunity. The government's Oman Vision 2040 plan is also in play, aiming to diversify the economy and improve infrastructure, which supports the real estate market.
Muscat is not just sitting still; it's transforming. Major projects like the Sultan Haitham City and the Muttrah Development Project are underway, making the city even more appealing. These developments, along with infrastructure upgrades like the Muscat Expressway expansion, are drawing in both expatriates and tourists, enhancing the city's growth potential.
Property prices are on the rise, especially in popular neighborhoods like Al Mouj and Qurum. This trend indicates a strong market potential for investors looking to capitalize on Muscat's growing appeal. The city's development projects and rising demand make it a prime location for property investment.
Sources: Times of Oman, Zawya, Global Business Outlook
7) Monitor global oil trends to time your real estate transactions in Oman, as the market is heavily influenced by oil prices
Oman's real estate market is closely tied to global oil prices.
When oil prices drop, like in 2020, Oman's economy feels the pinch, and the real estate market slows down. Back then, crude oil prices averaged $44.74 per barrel, which led to a sluggish market. But don't let that scare you off; the market has shown it can bounce back.
Fast forward to 2023 and 2024, and you'll see a different story. Despite some bumps in the road, Oman's real estate sector proved its resilience. In the first half of 2024, the transaction value hit $3.63 billion, a slight uptick from the previous year. This shows that even with oil price fluctuations, the market can still thrive under the right conditions.
It's important to know that oil and gas revenues make up about 72% of Oman's government income. So, any change in oil prices can directly impact the economy and, by extension, the real estate market. This was clear during the 2020 oil price drop, which led to economic contraction.
For those looking to invest, keeping an eye on global oil trends can give you an edge. When oil prices are stable or rising, the real estate market tends to follow suit. This insider tip can help you time your purchase or sale for maximum benefit.
So, while the market is influenced by oil prices, it's not all doom and gloom. With the right timing and a bit of market savvy, you can make a smart investment in Oman's real estate sector.
Sources: Global Business Outlook, Global Property Guide, IFP Info
8) Look for properties with rental guarantees to ensure steady income and lower risk
Investing in properties with rental guarantees is a smart move for a steady income and reduced risk.
In 2023, Oman's real estate market saw a boom, with transactions hitting OMR2.6 billion, largely driven by the rental sector. This surge indicates a thriving market where rental properties are in high demand. The increase in lease contracts by 18.3% to OMR1.55 billion underscores this demand, suggesting that properties with rental guarantees are likely to maintain high occupancy rates. This means less stress over vacancies and a more reliable income stream.
Choosing properties with rental guarantees can be particularly beneficial in Oman, where the market is growing rapidly. The demand for rental properties is strong, and this trend is expected to continue, making it a promising time to invest. With rental guarantees, you can enjoy the benefits of this growth while minimizing the risks typically associated with property investment.
Professional property management services, like those from AL Hudu Real Estate LLC, play a crucial role in this investment strategy. They handle rent collection and contract management efficiently, which can further reduce the risks and hassles of property ownership. This support makes rental-guaranteed properties an even more attractive option for investors looking for a hands-off approach.
In Oman, the real estate market's growth is not just a temporary trend. The country's economic development and increasing population are driving the demand for rental properties. This environment creates a favorable setting for investors seeking stable returns through rental guarantees.
By investing in properties with rental guarantees, you can tap into Oman's booming real estate market while enjoying a steady income and reduced risk. This strategy offers peace of mind and financial security, making it an appealing choice for both new and seasoned investors.
Sources: Economy Middle East, Meridian Pacific Properties, AL Hudu Real Estate LLC
We have made this infographic to give you a quick and clear snapshot of the property market in Oman. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Have liquidity for cash transactions, as locals often prefer them
In Oman, cash is king in the real estate market.
Locals often prefer cash transactions because they are faster and more secure than dealing with banks. This trend has led to a 6.4% increase in real estate value, hitting around $4.41 billion by mid-2024. Cash deals skip the hassle of mortgage approvals, making them a favorite among buyers and sellers alike.
Real estate agents in Oman frequently highlight that cash offers close quicker than those requiring financing. This speed is a big plus for sellers who want to avoid the uncertainty of mortgage approvals. The lower mortgage penetration rate in Oman means fewer people are opting for loans, even though the value of these loans has gone up.
For buyers, having cash on hand can make your offer stand out. Sellers appreciate the certainty and reduced risk that comes with cash transactions. This preference for cash is deeply rooted in the local market culture, where liquidity is often seen as a sign of serious intent.
In Oman, the number of mortgage contracts has actually dropped by 15.9%, despite their increased value. This decline underscores the strong preference for cash deals, which are seen as more straightforward and less risky.
So, if you're considering buying property in Oman, remember that cash can be your best bargaining chip. It not only speeds up the process but also makes your offer more appealing to sellers who value quick and secure transactions.
Sources: Global Business Outlook, Economy Middle East
10) Consider Oman for stable real estate investments, as its market is less volatile than other Gulf countries
Oman's real estate market is known for its stability, especially when compared to other Gulf countries.
In 2024, Oman experienced a modest 2.6% decline in its residential real estate price index, mainly due to a 17.3% drop in apartment prices and a slight 0.8% decrease in villa prices. This shows how the market remains relatively steady even when facing challenges.
Reports like the 'Oman - H1 2024 Market Overview' by Hamptons International Oman highlight the sector's steady growth, driven by a positive economic outlook and government initiatives to attract foreign investment. These efforts are making Oman a more appealing destination for property buyers.
Oman ranks 11th globally in the return on real estate investment index, reflecting its stable rental yields. With a net rental income of 7.2%, investors can expect consistent returns, making it a reliable choice for those looking to invest in real estate.
Experts attribute the market's stability to Oman's stable political environment, strategic economic diversification, and favorable mortgage terms. These factors make property purchases more accessible, boosting demand and ensuring a steady market.
Government policies, such as relaxing property ownership laws for foreigners and offering tax incentives for developers, have been crucial in attracting both domestic and international investors. This has further solidified the market's stability, making it a prime location for investment.
Sources: The Arabian Post, Arab News, The Arabian Stories, Zawya
11) Avoid older properties in Oman without thorough inspections, as harsh climate can lead to high maintenance costs
Buying an older property in Oman? Be prepared for high maintenance costs due to the country's harsh climate.
Oman's scorching temperatures and high humidity can really take a toll on buildings. This means older homes often need more frequent repairs, which can quickly add up. Imagine dealing with constant wear and tear just because the weather is relentless.
And it's not just the heat. Extreme weather events like heatwaves make things worse. Remember June 2021? Temperatures soared over 50°C, causing significant damage to many buildings. If you're eyeing an older property, a thorough inspection is a must to avoid unexpected headaches.
Insurance data tells a similar story. After Cyclone Mekunu in 2018, there was a noticeable spike in claims. Older properties are more vulnerable to climate-related damage, which means higher insurance premiums and repair costs. It's something to think about when budgeting for your new home.
So, if you're considering an older property, factor in these potential costs. The climate in Oman isn't just a backdrop; it's a major player in property maintenance. Thorough inspections can save you from future surprises and help you make a more informed decision.
In short, while older properties might have charm, they come with their own set of challenges. Understanding the climate's impact on maintenance is key to making a smart purchase.
Sources: IEA, Land Network, Times of Oman
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.