Muscat: The Central Bank of Oman (CBO), which released the eleventh issue of the Financial Stability Report (FSR) 2023), has said that the 'Omani financial system exhibited remarkable resilience to the heightened volatility and liquidity stress that permeated a large part of the global financial system.
In addition, the FSR 2023 reaffirms that in Oman 'the short-term risks to financial stability remain muted" and that the "Omani financial system remains strong and well-poised to support the economy.'
The report stated that unlike the developments in many advanced countries, 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 eased some segments of the Omani real estate market, reviving the demand for real estate properties. In addition, given the rise in policy rates, so far there are no signs of tightening in lending to the real estate sector as the lending rates remained unchanged.
CBO has authorised FLCs to lend for commercial real estate projects besides lending to real estate developers, this additional source of financing will further bolster the real estate sector in Oman.
The expatriate population, a major user of rental residential properties, rose by eight per cent in 2022 as compared to the beginning of the pandemic year 2020. The recent rise in the expat population to the prepandemic level along with the resumption of commercial activities and the increase in the number of Omanis joining the workforce as a result of the recovery in economic activities has rebooted the demand for property.
Resultantly, during 2022, residential property prices inched up on average by 7 per cent with the residential real estate index recovering from its lows in 2021. Similarly, 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 report stated.
Properties issued in the name of GCC citizens increased by 79.3 per cent to 633 in the first six months of 2023, compared to 353 during the same period last year, according to the National Centre for Statistics and Information (NCSI). 884 properties were issued to GCC residents at the end of 2022.
A total of 117,870 properties were issued during the same period this year, an increase of 1.3 per cent from 116,324 in 2022. It may be noted that the total value of traded property also increased during the same period by 18.9 per cent.