Oman's property prices surge 7.3 percent amid land demand

In the first quarter of 2025, Oman's residential property market experienced a significant surge, with prices rising by 7.3 percent year on year, according to the National Center for Statistics and Information. This growth was largely attributed to a notable increase in residential land values, which alone saw a rise of 6.5 percent. Additionally, the overall residential real estate price index indicated a quarterly growth of 5.5 percent, showcasing the market's robust health despite potential economic fluctuations. Notably, the prices for apartments rose by 4.3 percent, while villa prices recorded a 4.5 percent increase during the same period. The rise in real estate prices in Oman reflects broader economic trends within the region. The Central Bank of the UAE projects a real GDP growth of 4 percent for 2024, alongside an anticipated acceleration to 4.5 percent in 2025. These projections indicate an optimistic outlook for economic activities in the Gulf Cooperation Council (GCC) region. Interestingly, compared to Oman, Saudi Arabia reported a mere 1.3 percent growth rate in 2024, highlighting differing dynamics across the neighboring economies, particularly in relation to their ongoing Vision 2030 reforms, which aim to diversify their economies away from oil dependency. Amid these economic shifts, the consumer price index for housing-related expenses in the GCC has shown upward movement as well. In May 2025, the consumer price index recorded a slight increase of 0.1 percent from April 2025. The housing, water, electricity, gas, and other fuels segment saw its own rise of 6.8 percent year on year, attributed to increased rental prices, which surged by 8.1 percent. This upward pressure on housing costs is increasingly affecting residents’ affordability in the region and points towards a tightening rental market. Although various sectors such as food, beverages, and personal goods also experienced price changes, the increase in rents could signal ongoing demand pressures within the residential real estate market. These factors indicate a nuanced real estate environment where demand remains paramount, potentially leading to further price fluctuations for housing in both Oman and neighboring countries during the coming years.