Oman's Property Market Shows Resilience Amidst Regional Tensions

Oman's property market demonstrated activity with total transaction values reaching OMR1.43 billion by the end of June 2026. This financial indicator reflects ongoing market engagement and strong economic activity in the Sultanate's real estate sector. The sustained level of transactions shows the market's underlying strength and investor confidence. Separately, the strategic location of ports in Salalah, Duqm, and Sohar significantly contributes to the country's economic stability and appeal. These key maritime facilities are positioned outside the Strait of Hormuz, offering alternative shipping routes and potentially mitigating risks associated with regional geopolitical dynamics. This geographic advantage underpins Oman's growing role in global trade and logistics, enhancing its attractiveness as a stable investment destination. The strategic positioning of these ports is a key factor in the nation's broader economic resilience, supporting various sectors including real estate.

Transaction Value and Volume Surge

Property transaction values in Oman increased by 5.4% compared with the same period last year, reaching OMR1.43 billion by the end of June 2026. This rise occurred alongside a 12.2% increase in the number of property contracts, indicating heightened market activity and a larger volume of deals being concluded. The increase in both value and volume points to a healthy and expanding market. Despite these gains in value and volume, mortgage activity experienced a marginal decline of 0.3%. This slight decrease in mortgage-backed transactions suggests that a portion of the market activity may be driven by cash purchases or alternative financing methods, yet it does not detract significantly from the overall positive trend. The overall market performance suggests sustained interest and engagement within the Omani property sector, reflecting underlying demand from both local and international investors.

Foreign Investment and Market Appeal

Foreign direct investment (FDI) in Oman's real estate sector reached OMR602.5 million by the end of the first quarter of 2026. This inflow reflects continued international interest in the Sultanate's property market, with FDI in real estate showing a 1.2% increase year-on-year. The investment figures show a growing confidence among foreign entities in Oman's economic stability and development prospects within the real estate domain. This consistent foreign capital injection is a key driver for development and growth across various property segments. Separately, the residential rental market in specific areas has shown notable increases, indicating strong demand. Rents for four-bedroom villas in Madinat Sultan Qaboos, a prominent residential area, experienced a significant rise of 22%. This upward trend in rental values suggests increasing demand within key residential segments, contributing to the overall appeal of Oman's property landscape for both investors seeking rental yields and residents looking for quality housing.

Residential and Commercial Performance

Apartment rents in Qurum increased by 16%, indicating an upward trend in that residential area and noting its desirability. Al Mouj maintained its position as Oman's premium residential destination, attracting consistent demand and commanding top-tier prices. Average monthly apartment rents in Al Mouj reached OMR664, reflecting its high-value market segment and the quality of life it offers. Additionally, Al Mouj remained the market leader in the four-bedroom villa segment. These villas commanded average rents of OMR1,700, showing the sustained appeal and premium pricing in this specific development within Oman's property landscape. The figures suggest a strong performance in key residential areas, particularly in the upscale market represented by Al Mouj, indicating strong and consistent demand for high-quality residential properties.

On the commercial front, Muscat's office market remained broadly stable during the second quarter of 2026. Rental rates across Muscat's Central Business District (CBD) and Qurum were unchanged, demonstrating a consistent demand-supply balance in these established commercial hubs. Ghubrah and Azaiba, however, recorded modest office rental growth of 4%, suggesting emerging demand in these areas or a tightening of available space. This mixed performance across different commercial zones notes the nuanced dynamics within Muscat's office market.

Economic Outlook and Expert View

Foreign direct investment in real estate increased by 1.2% year-on-year, reinforcing the sector's appeal to international capital. Muscat's office market remained broadly stable in the second quarter of 2026, with rental rates in the Central Business District and Qurum unchanged, reflecting a steady commercial environment. Ghubrah and Azaiba saw modest office rental growth of 4%, indicating specific pockets of demand. Looking ahead, Oxford Economics forecasts a positive trajectory for the Sultanate's economy. The reputable economic analysis firm projects gross domestic product (GDP) growth of 6.3% in 2027 and an even stronger 7.1% in 2028. These optimistic economic forecasts provide a strong foundation for continued growth in the property market, suggesting a favorable environment for investors and developers in the coming years.