Oman’s real estate sector is gathering momentum, with economic confidence driving higher domestic sales and amended property ownership rules drawing increased interest from foreign investors.
Some RO1.3 billion ($3.4 billion) worth of property transactions were registered in the first nine months of this year, compared to RO1.1 billion ($3.1 billion) in the whole of 2009, according to data released by the Ministry of Housing.
Ownership deals by GCC citizens also grew by 40.7 percent to 2,300 in the first six months of 2010 while some 5800 mortgage contracts were signed with a total value of RO698m ($1.8 billion).
Meanwhile, a report by the hospitality research group PKF Consulting released in October noted growing interest in residential units located in integrated tourism complexes (ITCs) spread along the country’s coast. ITCs are the easiest avenue for foreign nationals looking to enter the local property market.
Oman has largely opened up its real estate sector to foreign investors in the last decade, with the first major step a 2002 decision to grant GCC nationals the right to own property for residential or investment purposes.
This was followed in 2006 with legislation allowing foreigners of other nationalities to directly own property within ITCs.
These measures have helped fuel Oman’s real estate expansion and could serve as a yardstick for property development in the region, Hilal Ali Al-Sulaimani, general manager of Hilal Properties, told the Oman Observer last month. “When Oman formulated land ownership rules, the real estate scene in the Sultanate received a real fillip,” he said.
Amendments to Omani land use laws issued by Royal Decree in September relaxed foreign shareholding restrictions, enabling public and closed joint stock companies with a minimum of 30 percent Omani shareholding to own land. Significantly, the amendments allow these companies to engage in real estate development as a business object, a permission that was previously restricted to 100 percent-Omani and later 100 percent-GCC owned companies.
This further opening up of the sector could add impetus to the market, which is already seeing growth due to domestic demand fuelled by economic growth and a young population. Speaking at a recent property financing expo held by BankMuscat, Tyler Scott, a senior manager for sales and leasing with real estate brokers Engel and Volkers, said buyer confidence was returning and interest in a broad range of products was on the rise.
“The Omani real estate market is quite distinct and quite characteristic of the country,” he said. “The property market has witnessed big adjustments and is presently enjoying good support.”
While there were concerns that a big budget infrastructure program launched by the state would divert construction capacity away from residential projects, the projects are unlikely to create long-term bottlenecks in supply, leaving the market free to build on its strong foundations.
In the meantime, the government’s plans to boost transport and housing infrastructure under its “Vision 2020” program have led to growing interest in the construction sector. The industry is valued at US$3.7 billion this year and should register growth rates of around 5 percent in the next three years, according to the “Oman Infrastructure Report Q4 2010”, published in November by companiesandmarkets.com.
