Oman's real estate market in Q1 2026: what do Savills data tell the investor?

Macro context: Oman's economy and the real estate market

GDP, inflation, and the construction sector

The report indicates that Oman's economic outlook remains positive, as GDP reached 42.1 billion OMR at the end of Q4 2025, representing a 4.6% year-on-year growth. The source of this growth was the stable performance of the oil and gas sector and the continued expansion of non-oil activities. This is significant for the real estate market, as residential demand, office leasing, and development activity depend on the health of employment, businesses, and capital expenditure.

The construction sector contributed 2.8 billion OMR and grew by 2.4% compared to the previous year. This is not just information about the scale of construction. For an investor, it means that the supply of new projects and the pace of investment completion should be analyzed alongside tenant demand. A market where the construction sector is growing may offer new opportunities, but it requires verifying whether supply is outpacing demand in specific locations.

Inflation stood at 1.26% in March 2026. The report describes it as slightly higher. In investment practice, this level of inflation is important for operating costs, rents, maintenance costs, and finishing budgets, but it does not in itself determine the profitability of a purchase. An investor must weigh inflation against real rent, maintenance costs, and potential financing.

How should an investor read macro data?

Macro data from the report should be treated as a risk filter, not as a standalone buying argument. In practice, an investor should check whether the analyzed location benefits from demand generated by economic growth or if it relies solely on general sentiment toward Oman. One should compare rents in a given district, rental liquidity, financing costs, and the level of competitive supply. The report provides a macro view, but the purchasing decision must drill down to the specific asset.

Real estate transactions: market value growth to 678 million OMR

What does an 18.4% increase in transaction value mean?

According to the report, the Ministry of Housing stated that the value of real estate transactions reached 678 million OMR by the end of March 2026. This is an 18.4% increase compared to the same period in 2025. This is one of the strongest signals in the report, as it shows higher turnover value in the market, rather than just rent stabilization.

At the same time, the number of contracts increased by only 0.5%. This relationship is important: if the value of transactions grows significantly faster than the number of contracts, an investor should check whether the growth results from higher unit values, a greater share of mortgage financing, a change in the transaction structure, or a concentration of turnover in more expensive locations. The report does not break this value down into segments, so one should not assume which type of property is responsible for the growth.

Mortgage activity increased by 23.6%. This may indicate greater use of financing in transactions, but the report does not provide details regarding the structure of loans, the level of down payments, or the type of buyers. For an investor, this means the necessity of asking additional questions before purchasing: is the demand in a given location based on end-users, corporate tenants, investment buyers, or bank financing?

What to check before buying?

The investor should ask the seller or advisor how a given offer fits into the broader growth of transaction value. Specifically: are prices rising in the given location, is the number of transactions increasing, are comparable sales assets available, and does mortgage financing affect demand? The report provides direction, but it does not replace local price due diligence.

FDI in real estate: a decline to 584.3 million OMR

Why should the decline in FDI not be ignored?

The report indicates that Foreign Direct Investment in the real estate sector fell to 584.3 million OMR at the end of Q4 2025, which represents a decline of 2.4% year-on-year. Compared to the rising value of transactions, this is a mixed signal: the market remains active locally, but the inflow of foreign capital into the real estate sector was weaker than a year earlier.

For an external investor, this information is significant because FDI can affect market depth, liquidity, project scale, and interest from international buyers. A 2.4% decline does not necessarily mean a market deterioration, but it reduces comfort with the thesis that foreign capital automatically strengthens all segments. It is necessary to check which projects actually attract demand and which only benefit from Oman's general image as a stable market.

The report does not provide the structure of FDI by asset type, location, or source of capital. This limitation must be clearly taken into account in the analysis. It cannot be stated on this basis that the decline concerns apartments, offices, land, or residential projects. However, it can be said that the investor should maintain discipline when assessing foreign exposure and exit liquidity.

How to use FDI data in practice?

Before buying, it is worth checking whether the project has real interest from tenants and buyers, rather than just declarations of growing foreign demand. One should ask for the project's sales data, buyer profile, absorption rate, transaction history in the area, and information about rental operators. The decline in FDI from the report does not close the market, but it forces greater selectivity.

Apartment rental market: Al Mouj's advantage and location differentiation

Two-bedroom apartments in Q1 2026

In the two-bedroom apartment segment, Al Mouj achieved an average monthly rent of 710 OMR, which means an increase of 3% in Q1 2026. The report emphasizes that this location continues to achieve a rental premium and remains a preferred choice among tenants. For an investor, this is a signal that Al Mouj has a strong position in the rental segment, but it is not enough to compare the rent rate alone. One must also calculate the purchase cost, maintenance costs, and potential vacancy periods.

Muscat Hills achieved an average rent of 491 OMR, with an increase of 2%. The report describes the broader market as stable, but with local differences. This is an important observation: in Oman, the housing market should not be analyzed as a single average. The differences between Al Mouj, Muscat Hills, Al Khuwair, and Qurum show that location remains the main filter for investment decisions.

Al Khuwair fell to 385 OMR, while Qurum maintained rent at the level of 350 OMR. The report does not elaborate on the reasons for these differences, so they should not be speculated upon. However, a practical conclusion can be drawn: the investor should compare not only the rent level but also the stability of the rate, the tenant profile, competition, and the building standard.

What does a rental premium mean?

The Al Mouj rental premium indicates that tenants are willing to pay more for a specific location and its market standard. However, this does not automatically mean higher purchase profitability, as the report does not provide transaction prices or operating costs. An investor should compare the rent with the purchase price, community fees, management costs, and projected occupancy.

Villa rental market: Al Mouj and Muscat Hills as locations for deeper analysis

Four-bedroom villas and demand profile

In the four-bedroom villa segment, Al Mouj achieved an average monthly rent of 1,770 OMR, an increase of 2%. The report describes Al Mouj as a leading location in this segment and points to its position as a lifestyle destination. For an investor, this means that villas in Al Mouj can serve tenants willing to pay higher rents, but again: the rental rate alone does not replace a full calculation of the cost of capital.

Madinat Sultan Qaboos recorded an average rent of 908 OMR, a decrease of 1%. Muscat Hills reached 1,200 OMR, an increase of 25%. Such a large difference between locations shows that the villa segment is not uniform. One location may be growing, another may be under pressure, and yet another may maintain its position due to the scale of demand and standard.

The report uses the phrase "sustained demand" despite price corrections. This is important for an investor because demand does not always mean rent growth in every location. It may mean rental liquidity, lower vacancy rates, or the location's resilience during weaker periods. Without data on occupancy and purchase prices, these rates should not be converted into profitability.

How to analyze the villa segment?

In the villa segment, an investor should check the tenant profile, the length of typical leases, home maintenance costs, and requirements regarding technical service, gardening, air conditioning, and repairs. The report indicates rents but does not provide operating costs. In practice, the difference between an apartment and a villa lies not only in higher rent but also in the owner's greater responsibility for maintaining the asset.

Office market in Muscat: stable rents in major submarkets

Office rental market in Q1 2026

The report indicates that the office market in Muscat remained stable in major submarkets in Q1 2026. The CBD maintained a rate of 2.0 OMR per m2 per month, Qurum 3.5 OMR, Al Khuwair 4.5 OMR, Shatti Al Qurum 6.0 OMR, Ghubrah 5.5 OMR, and Azaiba 6.0 OMR. The lack of changes in these locations suggests a market without sharp rent movements during the reporting period.

For an office investor, stability can be operationally beneficial, but it requires careful interpretation. Stable rent does not yet reveal vacancy rates, lease lengths, tenant quality, or space fit-out costs. The report provides rental rates but does not describe the structure of office demand or space absorption. Therefore, office analysis should go beyond the nominal rent per m2.

The highest rates among the listed submarkets are achieved by Shatti Al Qurum and Azaiba, at 6.0 OMR per m2 per month each. Ghubrah maintains 5.5 OMR, Al Khuwair 4.5 OMR, Qurum 3.5 OMR, and the CBD 2.0 OMR. Such a spread shows that even in a stable nominal market, location and space standard matter.

What to check for an office asset?

You should ask about lease lengths, technical standards, fit-out costs, tenant history, vacancies, service charges, and the possibility of rent indexation. The report confirms the stability of rates, but it does not replace an analysis of tenant quality and cash flow predictability.

Outlook 2026: lower growth forecast and regional risks

GDP forecast adjustment to 1.9%

In the outlook section, the report indicates that economists have lowered Oman's GDP growth forecast for 2026 to 1.9%. The reason is regional disruption related to the conflict with Iran. This is a significant change in tone compared to earlier macro data, which showed GDP growth of 4.6% year-on-year at the end of Q4 2025. Investors should therefore distinguish historical data from the forecast.

The report simultaneously points out that Oman is still perceived as one of the economies least exposed to spillover effects. The argument for this is continued port operations and the relatively limited impact of disruptions compared to airspace closures in other parts of the region. This is important, as the efficiency of ports and exports affects public finances and the operational stability of the economy.

Public finances are expected to benefit in 2026 from largely uninterrupted exports, especially in an environment of high energy prices. At the same time, the conflict has disrupted global supply chains, contributing to rising costs and strengthening inflationary pressure. For the real estate market, this means two opposing forces: support from exports and energy, and cost risks on the side of construction, finishing, and operations.

How to translate the outlook into an investment decision?

Investors should test scenarios. The first scenario assumes the maintenance of port operations and rental stability. The second assumes rising costs resulting from supply chain pressure. The third assumes slower economic growth at the 1.9% forecast. Every purchase should be checked for resilience to higher costs, longer lease times, and slower resale.

Practical investor checklist based on the report

7 steps before a purchase decision

Step 1: Separate historical data from the forecast

GDP at 42.1 billion OMR and 4.6% y/y growth refer to the end of Q4 2025. The forecast for 2026 has been lowered to 1.9%. These two levels of analysis should not be mixed. Historical data shows the starting point, while the outlook shows the risks for subsequent quarters.

Step 2: Check the segment, not just the country

The report shows different behaviors for apartments, villas, and offices. Apartments in Al Mouj have a rent of 710 OMR, villas in Al Mouj 1,770 OMR, and offices in Shatti Al Qurum 6.0 OMR/m² per month. These are different markets with different costs, tenants, and operational risks.

Step 3: Compare rental locations

For apartments, compare Al Mouj, Muscat Hills, Al Khuwair, and Qurum. For villas, compare Al Mouj, Madinat Sultan Qaboos, and Muscat Hills. For offices, compare CBD, Qurum, Al Khuwair, Shatti Al Qurum, Ghubrah, and Azaiba. Do not draw conclusions about all of Oman from one location.

Step 4: Do not calculate profitability without the purchase price

The report provides rents but does not provide sales prices, maintenance costs, financing costs, or vacancy rates. Therefore, it is impossible to honestly calculate profitability based solely on the report. Rent is the beginning of the calculation, not the final result.

Step 5: Check the impact of costs and inflation

Inflation was 1.26% in March 2026, but the outlook points to cost pressure resulting from global supply chains. When purchasing, one must therefore assess the cost of finishing, service, maintenance, and potential renovations.

Step 6: Assess financing liquidity

Mortgage activity increased by 23.6%. It is worth asking whether demand in the analyzed segment is based on credit, cash, or institutional leasing. Changes in financing conditions can affect sales liquidity.

Step 7: Note the report's limitations

The report does not provide sales prices, vacancy rates, maintenance costs, management costs, or buyer structure. These data must be collected separately before a decision. Otherwise, the analysis will be based on rents and macro data, but without a full investment model.

FAQ

Does the Savills Q1 2026 report confirm growth in the Omani real estate market?

The report confirms an increase in the value of real estate transactions to 678 million OMR by the end of March 2026, which is an 18.4% increase compared to the same period in 2025. At the same time, the number of contracts increased by only 0.5%, so market growth cannot be reduced to a higher number of agreements. The data points rather to an increase in turnover value and greater mortgage activity.

Which location has the highest rent for two-bedroom apartments?

According to the report, the highest average monthly rent for two-bedroom apartments is achieved by Al Mouj: 710 OMR in Q1 2026, with a 3% increase. Muscat Hills is at 491 OMR, Al Khuwair at 385 OMR, and Qurum at 350 OMR. However, the rent level alone is not enough to evaluate an investment, because the report does not provide purchase prices or maintenance costs.

What does the report say about the villa market in Oman?

In the four-bedroom villa segment, Al Mouj achieves an average monthly rent of 1,770 OMR, Muscat Hills 1,200 OMR, and Madinat Sultan Qaboos 908 OMR. Muscat Hills recorded a 25% increase, Al Mouj a 2% increase, and Madinat Sultan Qaboos a 1% decrease. This shows strong locational differences in the villa segment.

Is the office market in Muscat growing?

The report describes the office market as stable in Q1 2026. Rates in the main submarkets have not changed: CBD 2.0 OMR/m² per month, Qurum 3.5 OMR, Al Khuwair 4.5 OMR, Shatti Al Qurum 6.0 OMR, Ghubrah 5.5 OMR, and Azaiba 6.0 OMR. However, the stability of rates does not speak to vacancy rates or tenant quality.

What risk does the report's outlook indicate?

The outlook indicates a lowering of Oman's GDP growth forecast for 2026 to 1.9% due to regional disruptions related to the conflict with Iran. At the same time, the report emphasizes that Oman is perceived as an economy relatively less exposed to spillover effects, partly thanks to continued port operations. The risk remains rising costs resulting from disruptions in global supply chains.