Investing in Real Estate in Oman in 2024
Oman, located at the crossroads of the Arabian Peninsula, East Africa, and South Asia, and in close proximity to major regional markets, is increasingly attracting potential foreign investors. This article delves into the investment climate in Oman, the booming real estate market, and why it stands out as a prime investment destination in 2024.
Attractive Investment Climate
Oman’s foreign policy, characterized by its friendly stance towards all nations and hostility towards none, ensures that the country faces no significant external security threats. Internally, the political situation remains stable under the leadership of Sultan Haitham bin Tariq Al Said. His administration has been implementing measures to attract foreign capital, including tax incentives, permissions for investment in new sectors, and the reduction of state duties.
In February 2023, the Omani Council of Ministers reduced the fee for commercial registration for foreign investors and exempted companies from insurance bond requirements when bidding for government tenders. According to the World Bank, Oman’s GDP grew by 4.3% in 2022, with an inflation rate of 2.8%. The Omani Rial, pegged to the US dollar at a rate of 1 to 2.6, provides a stable financial environment for investors.
Booming Real Estate Market
For international real estate investors and those seeking overseas properties, Oman has become one of the most sought-after destinations in the Gulf region. The Omani government actively encourages foreign investments, welcoming hotel giants and developers with favorable conditions for their projects.
Data from the National Center for Statistics and Information of Oman indicate that by the end of July 2023, the total value of real estate transactions in the Sultanate had increased by 16.8%, amounting to $4.22 billion. Oman’s 1,700 km coastline, stretching from the iconic Strait of Hormuz to the sandy shores of the Arabian Sea, offers a blend of world-class amenities and the charm of Arabian culture, from ancient bazaars and medieval forts to high-end hotels and resorts.
The entry threshold for real estate investments in Oman is $135,000, enough to purchase an apartment in one of the few resort regions of the Sultanate, such as Salalah. In 2023, interest in purchasing real estate among Russian-speaking buyers in Oman tripled compared to 2022, with the average deal budget amounting to €310,000.
High Return on Investment
Oman’s real estate investment conditions and profitability indicators are comparable to those in Dubai. Short-term rental yields in Oman range from 12-13% per annum, while long-term yields stand at 6-8%. In the short term, Oman is attractive due to its low taxes: rental and sale of real estate are not taxed, VAT is 5%, and the registration fee for real estate is 3%.
A distinct advantage of investing in Omani real estate over Dubai is the absence of a minimum threshold for the residency program and an expedited procedure with minimal compliance for obtaining residency (in Dubai, expedited residency can only be obtained for ready properties). Additionally, opening a bank account in Oman is simplified.
Diversification and Growth
For a long time, Oman’s economic policy relied heavily on the extraction and export of oil and gas. Now, the government is striving to reverse this trend through revenue diversification from resource development. Against this backdrop, tourism and real estate markets in Oman have begun to grow rapidly, attracting many international investors. In a region where a significant portion of real estate transactions occurs in the UAE, Oman offers a lower entry threshold, favorable conditions, and significantly less competition in the rental market.
Why Invest in Oman?
1. Strategic Location: Oman’s strategic location makes it an ideal hub for trade and logistics.
2. Stable Political Environment: Under stable leadership, Oman offers a secure investment climate.
3. Tax Incentives and Reduced Fees: The government’s proactive measures to attract foreign investment make Oman an attractive destination.
4. Booming Real Estate Market: Significant growth in real estate transactions and high rental yields.
5. Low Entry Threshold: Compared to other Gulf states, Oman has a lower entry threshold for real estate investments.
6. Diversification Efforts: Government initiatives to diversify the economy beyond oil and gas bode well for long-term growth.
Muscat and Trump International Resort
Muscat, the capital city of Oman, is a key area of interest for real estate investors. One of the most notable developments in Muscat is the Trump International Resort , a symbol of luxury and high-end living. This development highlights the city’s potential and attractiveness to international investors.
In summary, Oman’s attractive investment climate, booming real estate market, and strategic efforts to diversify the economy present lucrative opportunities for investors in 2024. With favorable conditions, high returns, and a stable environment, Oman stands out as a promising destination for real estate investment.
