Muscat’s property market holds steady amid economic growth

MUSCAT: Oman’s real estate market is showing signs of resilience and selective growth in Q2 2025, driven by solid economic fundamentals and consistent demand in premium segments, despite a notable drop in foreign direct investment (FDI) in real estate.
According to Savills' Oman Property Market in Minutes – Q2 2025 report, the Sultanate of Oman's GDP reached RO 10.5 billion at the end of Q1 2025, marking a 4.7% year-on-year rise, fuelled by robust performance in the oil and gas sector and an 8% annual increase in the construction sector, which contributed RO 666 million. The report adds that inflation remained modest, at 0.82% as of June 2025.
However, the positive macroeconomic indicators did not translate into a proportional rise in real estate FDI, which fell by 36.8% year-on-year to RO 653 million in Q1. Additionally, data from the Ministry of Housing and Urban Planning showed the total value of property transactions reached RO 1.36 billion by June 2025 — a 3.5% drop compared to the same period last year. While the number of contracts declined by 2.3%, the number of mortgages increased by 6.2%, suggesting greater reliance on home financing solutions, particularly in the mid-market segment.
In the residential rental market, Al Mouj retained its dominance among 2-bedroom apartments, with rents averaging RO 709 per month. Qurum and Al Khuwair saw average rents decline to RO 393 (-13%) and RO 475 (-7%) respectively. Muscat Hills held steady at RO 350, indicating stable demand in that bracket.
For larger properties, Al Mouj again led the 4-bedroom villa market with monthly rents rising to RO 1,400. Muscat Hills surpassed this with a 15% quarterly increase to RO 1,500 per month, pointing to its rising appeal. Madinat Sultan Qaboos remained stable at RO 1,000.
In the office sector, Muscat’s key business districts reported mixed rental trends. Rents in the CBD and Qurum held at RO 2.0 and RO 3.5 per sqm, respectively. However, Al Khuwair and Ghubrah witnessed declines to RO 4.5, reflecting intensified competition. Shatti Al Qurum bucked the trend with a modest increase to RO 6.3, cementing its reputation as a premium office location. Al Athaiba saw a slight dip to RO 5.5.
Despite some soft spots, the overall market shows signs of stabilisation, underpinned by economic growth and targeted rental demand in high-end segments.