Why do we have so many vacant residential units?
Muscat: With several new housing projects being announced frequently, many apartments in the capital remain sparsely occupied.
Khalil al Zadjali, head of Cavendish Maxwell Oman, in an interview with the Observer, stated that of the 38,000 residential units added to Oman's market in 2024, around 15,500 were apartments in Muscat.
"With new units coming online, tenants often upgrade to newer, more modern apartments, leaving older units vacant and listed for rent, leading to a high number of "to let" signboards in the city. It takes time for both new and existing units to be rented out, which can increase the apparent vacancy rate, even though overall occupancy remains high," he explained.
The overall occupancy rate of over 80 per cent is an average across the residential sector and does not reflect differences between locations, building ages and property types.
Al Zadjali added, "If demand remains strong for newer or better-located developments, some areas and older buildings may experience higher vacancy rates. This dynamic turnover and ongoing addition of new supply can make vacancies more visible, even in a generally healthy market." There is a growing demand for apartments in new downtown areas emerging across Oman. These developments offer a modern lifestyle with easy access to amenities, making them attractive to both Omanis and expatriates seeking urban living experiences.
Regarding the demand for business properties, Al Zadjali noted, "Demand remains steady, especially in urban centres and newly developed commercial districts. Government initiatives under Oman Vision 2040 aim to diversify the economy and attract international investment, leading to interest in modern office spaces, retail outlets and commercial properties." Recent regulatory changes prohibit businesses from operating in residential units, aiming to enhance the business environment and encourage companies to move to designated commercial spaces. This has increased demand for purpose-built business properties.
As Oman's economy evolves, there is a shift towards a more international service industry, attracting foreign companies in sectors like tourism, logistics, healthcare and professional services.
Expanding zones where expatriates can purchase property could attract more interest from international buyers and residents, boosting overall market demand. Policies supporting affordable housing could also help meet the needs of a broader population, promoting balanced growth and improved housing access for middle-income households.
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Observer
2 days ago
- Observer
Why do we have so many vacant residential units in Oman?
Muscat: While we see several new housing projects being announced every day, we also come across lots of apartments sparsely or hardly occupied across the capital. Giving an insight into the situation, Khalil, Alzadjali, head of Oman, Cavendish Maxwell, said in an interview to the Observer, "Of the 38,000 residential units added to Oman's residential market in 2024, around 15,500 were apartments in Muscat. As these new units come online, many tenants opt to upgrade from older properties to newer, more modern apartments. This transition results in older units being vacated and listed for rent, contributing to the visible number of 'to let' signboards across the city." He added, "Additionally, it takes time for both new and existing units to be absorbed by the market once they become available for rent, which can further increase the apparent vacancy rate, even when overall occupancy remains high." The overall occupancy rate of over 80% is an average across the entire residential sector and does not reflect the variation between different locations, the age of buildings, and property types. "If demand remains strong for newer or better-located developments, some areas and some older buildings may experience higher vacancy rates. This dynamic turnover and the ongoing addition of new supply can make vacancies more visible, even in a generally healthy market. There is a growing demand for apartments in the new downtowns emerging across Oman. Most of these developments offer a modern, integrated lifestyle with convenient access to amenities, including retail and entertainment, all within walking distance in the community. Additionally, their advanced Infrastructure and proximity to business districts make them highly attractive to both Omanis and expatriates seeking a vibrant urban living experience. Khalil, Alzadjali, head of Oman, Cavendish Maxwell, On the demand for business properties, he said, "The demand remains steady, particularly in urban centres and newly developed commercial districts. This trend is supported by government initiatives under Vision 2040, which aims to diversify the economy and attract international investment. As a result, there is ongoing interest in modern office spaces, retail outlets, and flexible commercial properties that serve both local and international businesses." Recent regulatory changes now restrict the operation of businesses from residential units; a move intended to professionalize and enhance the business environment and encourage companies to relocate to designated commercial spaces. This policy adjustment has contributed to increased Demand for purpose-built business properties, Alzadjali added. "While Oman's service industry has historically been highly local, there are indications that this may gradually change. The development of new downtowns, improved infrastructure, and government incentives is making Oman more accessible to regional and global service providers. Sectors such as tourism, logistics, healthcare, and professional services are seeing growing interest from international participants. As Oman's economy continues to evolve, the service industry may become more international in scope, with broader participation from foreign companies and a wider range of business offerings." There is potential to further enhance the sector by expanding zones where expatriates are permitted to purchase property. Currently, foreign ownership is limited to specific designated areas. Broadening these opportunities would likely attract greater interest from expatriates already residing in Oman, as well as increase investment from international buyers, thereby further boosting overall demand in the market. Additionally, policies that support the development of affordable housing could help address the needs of a broader segment of the population. By increasing the availability of reasonably priced homes, the market may see more balanced growth and improved access to housing for middle- income households. This approach could contribute to a more inclusive and sustainable real estate sector. To achieve a more balanced distribution of real estate activity across the country, continued investment in regional infrastructure, transportation networks, and public services will be essential, he said.
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2 days ago
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Self-service platform for issuing property title deeds launched
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3 days ago
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EC-Council and Modern College of Business and Science Launch Cybersecurity Centre of Excellence in Oman
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