he opening of Oman’s real estate market to foreigners began in 2002, as part of the “Vision 2020” plan, which aimed to diversify Oman’s economic base and reduce its dependence on oil revenues. In December 2002, GCC nationals gained the right to own real estate for residential or investment purposes. In February 2006 other nationalities were also given the right to own real estate, but only in Integrated Tourism Complex (ITC) developments.
Recently, the government has been again considering opening up more areas for foreign homebuyers, hoping to buoy the property market. The recommended reforms include allocating special zones where expats can buy properties at more reasonable prices as compared to tourist complexes.
Under current laws, expatriate owners automatically get residency rights for themselves and their immediate families when they buy property in designated ITC developments.
Recently, the government, together with Oman Real Estate Association (OREA), has been considering opening up more areas for expats and foreign homebuyers.
The problem is that many of the integrated tourist complexes are beyond the means of lower paid expats living and working in Oman. The recommended reforms include allocating special zones where expats can buy properties at more reasonable prices as compared to tourist complexes.
“This has to be done on real demand, and not as a speculative market, where buyers purchase a house with the hope that it will become more valuable at a future date,” said OREA vice chairman Hassan Juma.
A few years back, Cluttons forecast that a two-tier market would develop. Properties well-matched to tenant desires in terms of quality and design would have high occupancy rates and relatively stable rental values. Poorly built properties would have declining rents, and be mostly uninhabited.
This is largely what has happened. There has been a continuous drop in demand and declining rental levels for older-style properties in the established central areas. The take-up of these properties has been very slow, due to a surge of new modern apartments with amenities and finish meeting international standards.
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