Muscat’s Real Estate Property Shows Steady Growth – Savills 2025 Report

Oman’s real estate market is showing signs of resilience and selective growth in Q2 2025, supported by strong economic fundamentals and continued demand in premium segments, despite a notable drop in foreign direct investment (FDI).
According to Savills’ Oman Property Market in Minutes – Q2 2025 report, the Sultanate’s GDP reached RO 10.5 billion at the end of Q1 2025, representing a 4.7% year-on-year increase. This growth was driven by strong oil and gas sector performance and an 8% annual rise in construction, which contributed RO 666 million. Inflation remained modest, at 0.82% as of June 2025.
Yet, the buoyant macroeconomic environment did not translate into higher real estate investment flows. FDI in the sector fell by 36.8% year-on-year, totaling RO 653 million in Q1. Data from the Ministry of Housing and Urban Planning showed that total property transactions amounted to RO 1.36 billion by June 2025 — a 3.5% decline compared with the same period in 2024. While the number of real estate contracts dropped 2.3%, mortgage activity rose by 6.2%, signaling growing reliance on financing solutions in the mid-market segment.

Residential Rental Market
Al Mouj retained its dominance in the two-bedroom apartment segment, with rents averaging RO 709 per month. In contrast, Qurum and Al Khuwair recorded declines, with average rents dropping to RO 393 (-13%) and RO 475 (-7%) respectively. Muscat Hills maintained stability, holding steady at RO 350, underscoring consistent demand.
For larger units, Al Mouj again led the market, with average monthly rents for four-bedroom villas rising to RO 1,400. Muscat Hills outpaced this growth, registering a 15% quarterly jump to RO 1,500 per month, highlighting its rising appeal. Madinat Sultan Qaboos remained stable at RO 1,000.
Office Sector Performance

Muscat’s key business districts reported mixed rental trends. Rents in the Central Business District (CBD) and Qurum held steady at RO 2.0 and RO 3.5 per sqm, respectively. However, Al Khuwair and Ghubrah saw declines to RO 4.5 per sqm, reflecting intensified competition. Shatti Al Qurum bucked the trend, recording a modest increase to RO 6.3 per sqm, reinforcing its status as a premium office location. Al Athaiba, meanwhile, experienced a slight dip to RO 5.5 per sqm.

Outlook
Despite uneven performance across segments, Oman’s real estate market shows encouraging signs of stabilisation. The combination of robust economic growth, steady mortgage uptake, and targeted demand in high-end residential and office segments suggests resilience in the face of global and regional investment headwinds. Analysts highlight, however, that reversing the decline in foreign direct investment remains a critical priority for ensuring sustained growth.