7 days ago
Oman: Why do we have so many vacant residential units?
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 such as 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.
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.
