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The Central Bank of Oman (CBO) recently released its 2023 Financial Stability Report which highlights the resurgence of economic activities, leading to a recovery in the Omani real estate market. Notably, the market began picking up in 2022 as economic conditions improved. The post-pandemic recovery of the population profile has played a pivotal role in reinvigorating segments of the Omani real estate market and reigniting demand for properties.
An essential driver of this market rebound has been the expatriate population, a significant user group of rental residential properties. In 2022, this population witnessed an impressive 8 percent rise compared to the pandemic's onset in 2020. The post-pandemic resumption of commercial activities and the growing number of Omanis joining the workforce have collectively revitalized economic activities, resulting in a renewed demand for properties.
According to CBO estimates, residential property prices gradually increased by an average of 7 percent in 2022. This gain marked a recovery from the lows experienced in 2021, reflecting the real estate sector's resilience.
A key factor contributing to the gradual rise in property prices has been the resurgence of economic activities, supported by favourable oil prices. The revival of the labour market has played a pivotal role, leading to an increased demand for workers and subsequently, more expatriates being employed in Oman. Amid these positive developments, housing rents have remained affordable, owing to the substantial supply of available properties.
Property transactions, particularly in terms of traded property values, experienced a dip during the pandemic's initial stages. However, a positive trend emerged, with gradual recovery observed in the latter part of 2021, continuing throughout 2022.
The CBO's assessment underscores the gradual recovery of Oman's property market, fuelled by resurging economic activities. The report's outlook is optimistic, as the CBO does not foresee any immediate correction in real estate prices, further highlighting the sector's stability.
In conclusion, the Central Bank of Oman's 2023 Financial Stability Report depicts a real estate market on a path of recovery, propelled by the resurgence of economic activities. The combined impact of this recovery and a consistent supply of properties has maintained affordable housing rents while fostering market stability.
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