The recent Financial Stability Report 2023 of the Central Bank of Oman (CBO) has underlined the resurgence of economic activities leading to a recovery in the real estate market and added that housing rents remain affordable due to abundant supply.
The CBO noted, “The real estate market in Oman began to pick up in 2022 amid the improvement in economic conditions. The recent recovery in the population profile from the pandemic has eased some segments of the Omani real estate market, reviving the demand for real estate properties.”
It added, “The expatriate population, a major user of rental residential properties, rose by 8 percent in 2022 compared to the beginning of the pandemic year 2020. The resumption of commercial activities after the pandemic and the increase in the number of Omanis joining the workforce has resulted in the recovery of economic activities, and rebooted the demand for property.”
As per the CBO estimates, residential property prices inched up on average by 7 percent during 2022, with the residential real estate index recovering from its lows in 2021.
The resurgence of economic activities following the pandemic, coupled with favourable oil prices, has led to a gradual uptick in property prices. This can be attributed, to some extent, to a recovery in the labour market, where the demand for workers has increased, resulting in a higher number of expatriates employed in Oman. However, despite these developments, housing rents still remain affordable due to abundant supply.
The property transactions (value of the traded property) that experienced a sharp decline at the onset of the pandemic gradually recovered in the latter part of 2021, and this positive trend persisted throughout 2022.
‘Overall, the property market in Oman appears to be recovering amid the resurgence of economic activity. Hence, we do not foresee any imminent correction in the real estate prices,’ the central bank noted.