Healthy growth in Oman's real estate

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MUSCAT -- Oman is known for its friendly and welcoming nature, thanks to its natural borders, coastal access to the Gulf of Oman and historical interaction with different cultures. It is unique in its landscape with an awe-inspiring splendour.

The country is one of the fastest growing economies in the Gulf for the government's prudent planning, calculated spending and investments in the non-oil sector.

The opening of Oman's real estate market is part of 'The Vision 2020' -- an economic diversification plan aimed at helping the country gradually reduce its oil contribution on to the GDP.

The real estate growth in the Sultanate is driven by strong and stable parameters. Omanis' rising purchasing power has fuelled growing demand for residential units. Foreign investment, liberalisation of property laws and healthy tourism have all added to the country's real estate growth.

In December 2002, GCC nationals were given the right to own property in Oman for the purpose of residence or investment, through an accord on cross-border real estate ownership. Following this, in February 2006, all other nationalities were given the right to own properties in Integrated Tourism Complexes. With this, expatriate property owners are allowed automatically to get residency rights for themselves and their immediate families, by virtue of the property acquisition.

Hilal Ali al Sulaimani, General Manager of Hilal Properties, says: "Ever since Oman formulated land ownership rules, the real estate scene in the Sultanate received a real fillip. Omani freehold has been making waves and is on the threshold of making a new yardstick for property development in the region the freehold way."

According to him, the strength of Oman's real estate stems mainly from both proactive government foresight and the nature of the market here.

From the perspective of a real estate developer, who is seeking a safe investment option, Oman has all the potential to make a magnificent and sustainable destination.

Oman's growing population means housing demand is outstripping supply. More than half of the natives are predominantly young. This young generation has all the desire to build or purchase its own houses and has great purchasing power leading to a higher demand for land.

One of the crucial elements of Oman's demography is its change in the family trends. Like elsewhere in the world, there is a shift from the joint family to the nuclear family system, especially in urban areas like Muscat, Salalah, Sohar or Sur. This makes young married couples looking forward to have their own houses, agrees Hilal.

The growing number of expat workers in Oman is also fuelling the real estate boom.

With the government's expansion and diversification efforts gathering steam, several projects including industrial, manufacturing and construction are taking shape increasing the country's dependence on foreign labour. This has again increased the demand for more residential, retail and business space.

"Oman's emergence as an attractive housing market is catering to a distinct niche. Property developers are leveraging the country's natural variety," says an architect at a property firm.

Planners take extreme care to keep Oman's distinctive building style though we give a modern touch, he adds.

Since Oman's opening up, investment into the real estate market has been skyrocketing.

The Wave Muscat took up the first initiative into this unchartered territory. It built a long strip of a beach in Muscat -- an integrated tourism complex -- where non-GCC nationals are allowed to buy real properties.

Obviously, the demand and the rate growth in the capital area is more because of the higher population and higher income here. A number of projects including villas, apartments, retail and office space is nearing completion in Muscat capital area.

Development at Al Sarooj and Madinat al Sultan Qaboos has produced a number of high-end properties.

Seeb with its dynamism, is being projected as a business hub with many companies having shifted their headquarters there or are planning to shift thanks to the availability of prurpose-built buildings in the Airport Heights.

Recently the government has designated a number of areas in the capital where apartment and office complexes of up to 12 stories are being permitted, a move expected to lead to a better supply of affordable housing.

With the government investing more in tourism projects, foreign participation is increasing thanks to incentives like land at low cost, availability of beachfront plots, lucrative infrastructure to investors.

This suggests phenomenal investor interest in Omani real estate projects.

By Samuel Kutty

© Oman Daily Observer 2010