Recent growth in the expatriate population in Oman, coupled with strategic investments to boost the economy, has spurred property demand and rent increases in the country, according to a Savills report.

After falling in 2017 and during the COVID-19 pandemic, the number of expatriate residents in Oman has started rising in recent times, posting a 33% growth from a low point of 1.63 million in September 2022 to a record-breaking 2.17 million in May 2023.

As the population expanded, the residential market has seen some positive impact, with housing rents in Muscat alone stabilising in general and growing in popular locations, Savills noted in a report released on Tuesday.

Rental values in sought-after locations like Al Mouj rose by around 10% to 20% over the last 18 months. In other areas like Qurum, rents have gone up by 5% to 15%.

“The resurgence of the expatriate population in Oman has had a positive impact on the residential rental market in Muscat,” said Ihsan Kharouf, Head of Savills Oman.

“This growth has led to increased demand for rental properties, especially in higher-quality localities.”

Savills said there has been an increase in demand in central locations like Al Mouj, Qurum, Shatti Al Qurum and Madinat Al Sultan Qaboos, among others. It is anticipated that expatriate numbers will continue to grow as the Omani economy continues to recover and oil prices remain favourable.

“Over the coming 12 months, we would expect rental values for mid-to-high-end units to remain relatively stable (and even show moderate increases in some locations),” said Matthew Wright, Head of Consultancy at Savills Oman.

Low-end properties, however, will continue to face downward pressure.

The Omani government has rolled out vital projects that could support economic growth. In June, the government awarded a $6.7 billion contract to build the world’s largest green hydrogen plant in Duqm.

It is also working to expand the capacity for the proposed metro rail network and pushing ahead with a passenger and freight rail link that will connect Sohar to the UAE.

The IMF has forecast steady growth in Oman’s GDP from 2024 to 2028.

(Writing by Cleofe Maceda; editing by Brinda Darasha) brinda.darasha@lseg.com