24-06-2025
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.
