Muscat set for a real estate boom
By Palazhi Ashok Kumar - Times of Oman
ó A real estate boom is set to emerge in Muscat
as the economy is increasingly considered as an
attractive investment destination for regional
and foreign investors.
Oman doesnít support unwarranted speculation.
Nevertheless, real estate development plans, in
the government and private sectors, according to
official sources, are being pursued actively.
Citizens from neighbouring countries, especially
from the UAE, Saudi Arabia, Jordan, Lebanon,
Egypt, Qatar and Kuwait are keen to invest in
Omanís real estate sector.
The prices of certain new properties ó completed
and under construction ó are quoted at 25-30 per
ďAs long as the authorities ensure a healthy
appreciation of real estate prices, Oman will
remain as an ideal real estate investment
destination. Nevertheless, potential buyers,
businessmen or salaried-class should not expect
real estate prices to reach an incredulous
dimension. Undoubtedly, real estate will witness
a reasonable increase in prices,Ē a real estate
investment consultant from Dubai told the Times
of Oman. Businessmen from Pakistan and India are
also keen to buy properties in Oman.
The salaried-class, especially the high-income
and middle-class groups prefer buying small and
medium-size villas and flats. Buyers, sources
said, prefer investing in properties, preferably
in and around the capital area rather than
buying properties in the interior.
They also prefer buying new properties rather
than buying 15-20-year-old properties regardless
of the location.
Most buyers judge that the Muscat region will
remain as one of the key contributors to the
nationís construction and economic vitality. ďA
boom in Omanís construction, in one form or the
other, is already there. It is evident from the
recent upsurge in the number of expatriate
workers in the construction sector.
The number of expatriates working in Omanís
construction sector climbed 20 per cent to
nearly 145,000 in the first nine months of the
current year ended September 30, 2006. Foreign
labour is a vital component of the construction
sector. More precisely, the construction sector
created nearly 25,000 fresh jobs for expatriates
in nine months since December 2005,Ē official
sources said. Consumer spending has recorded its
biggest increase in December 2006 on Christmas,
Eid and New Year holidays.
Inflation is on the rise, and the prevailing
relatively moderate inflation of more than three
per cent sets enough room for further growth in
economic activity. Technically, the total number
of Omanis and expatriates working in the private
sector has witnessed almost similar growth in
The number of Omanis and expatriates working in
the private sector grew by 12.2 per cent and
13.6 per cent, respectively, in the first nine
months of 2006 to about 110,600 and 482,700,
More importantly, Omanís private sector created
nearly 58,000 fresh jobs for expatriates and
more than 12,000 jobs for nationals during the
first nine months of 2006.
ďThe increase in jobs for expatriates has
resulted in an increased real estate and
economic activity, and in the capital area, no
flats are available. If available or so,
landlords are demanding unreasonable rates.
Expatriate consumer confidence has increased to
an all-time high during the last quarter of
2006, which was reflected in their overall
ďThe year also witnessed a significant increase
in number of expatriate bank accounts in Oman,
spending for cars and electronic goods, number
of credit cards and other goods and services.
Those expatriates living with their families
spend a large portion of their salaries here,
fuelling the nationís economic activity. Those
who live alone spend a lot on telephone calls,
food, travel and entertainment,Ē a businessman
The government is already allowing foreign
nationals to buy properties in selected areas.
Leading banks are offering housing loans to both
nationals and expatriates at attractive rates.
For a foreigner, buying real estate in Oman is
more or less like an investment in fixed assets,
in a calm and emerging world-class Middle East
city rather than buying property in a foreign
country. ďThe Muscat real estate sector is on
the road to international fame. Indeed, projects
such as Blue City and The Wave will create
goodwill for Omanís property market. Buyers,
however, should not expect an unwarranted boom
in Omanís real estate sector, but of course, a
reasonable boom is in sight,Ē a consultant told
A little push by the authorities, according to
industry captains, will create wonders in Omanís
real estate and tourism sectors. No doubt,
concrete plans to build hotels and corporate
offices is set to fuel the construction
industry, in terms of activity, cement
production, fuel demand, employment
opportunities, infrastructure, international
goodwill. Many international businesses here are
exploring the scope of constructing own offices,
and a few have already started constructing
their own office buildings.
Further, a number of Omani towns are on the
threshold of a tourism and real estate boom,
positioning themselves as one of the best
tourist and business destinations in the region.
A little more foreign investor-friendly
policies, analysts think, can transform the
potential of tourism into a very profitable
reality in Oman. Despite concerns over the
health of the regional economy have been
mounting in recent months amid geopolitical
tensions, a 15 per cent increase in the salaries
of government employees and increased consumer
spending will give a big boost to the domestic
real estate market.