Developers seek solutions to real estate challenges
MUSCAT, MAY 21
The real estate market in the Sultanate of Oman has witnessed notable activity in recent years, particularly with the launch of Smart City projects such as Sultan Haitham City, and integrated residential neighbourhoods under the 'Sorouh' initiative, all of which aim to provide a comprehensive urban environment aligned with the goals of Oman Vision 2040.
However, this momentum faces several obstacles that threaten the pace of growth and investment in this vital sector chief among them being weak purchasing power among citizens, high construction costs, and land development challenges.
In this context, the Observer spoke with several prominent real estate developers during the 20th Oman Real Estate Conference and Design and Build Week, where they outlined the major issues confronting the sector and proposed realistic solutions to enhance market efficiency.
FINANCING: THE MAIN BOTTLENECK
Nasser Al Badi, General Manager of Al Badi Investment Group, emphasized that the concept of integrated residential neighborhoods, introduced by the Ministry of Housing and Urban Planning about four years ago, marked a qualitative leap in the housing sector, with the pilot project 'Hayy Al Naseem' initially showing strong sales. However, he noted that it soon faced marketing difficulties due to citizens' limited access to financing.
'It's unrealistic to expect citizens to purchase homes costing between RO 25,000 and 50,000 when their monthly income barely covers basic needs. Banks lend to those earning RO 325 a month, then deduct OMR 150 in repayments—how can someone live on the remaining amount?' Al Badi lamented.
He clarified that the problem isn't with the integrated neighborhood concept itself, but with the absence of financing mechanisms that align with citizens' incomes. He proposed long-term loans extending up to 50 years, with monthly deductions capped at 20–25% of income to ensure a dignified standard of living without overwhelming debt.
Qais al Bahri, CEO of Dream Villa, described housing finance as the 'fundamental dilemma,' stating that the challenge isn't legal but financial—where loan ceilings are not in line with citizen incomes or current property prices. He suggested that collaboration with banks, as seen in Saudi Arabia, could create holistic financing solutions.
RISING CONSTRUCTION COSTS
The rising prices of construction materials, along with permitting and approval fees, have created additional pressure on both developers and buyers.
Al Badi explained: 'To start a project, we have to pay thousands—RO 7,000 for mining approvals, RO 3,000 for environmental permits, and RO 18,000 for civil defense clearance. These fees ultimately inflate property prices.'
Al Bahri attributed the increase to global factors beyond local control, stressing that reducing construction quality to cut costs is not an acceptable solution.
MORE REGULATORY REFORMS NEEDED
Both developers acknowledged notable progress in real estate laws over recent years.
According to Al Bahri, the Ministry of Housing has become more flexible, offering easier eligibility for housing ownership. For instance, citizens can now purchase property even outside their native governorates, and support can reach up to RO 30,000 or even RO 50,000.
Al Badi praised the Ministry's escrow account system, which he described as an important regulatory measure that helps prevent real estate fraud.
ABUNDANT LAND BUT LIMITED INFRASTRUCTURE
Commenting on claims of land scarcity in some governorates, Al Badi denied there is a shortage of land, stating: 'We have thousands of unused plots, but the real issue lies in the lack of infrastructure—areas without water, sewage, or electricity.'
Al Bahri agreed, noting that 'owning land is not enough. The land must be livable with access to essential services, and this is what the Ministry has been focusing on recently.'
Al Badi proposed a different approach to stimulate the real estate market, one that goes beyond direct subsidies. He suggested allowing expatriates and their families to reside and own property.
'The demand for housing is low because the population isn't large enough to drive the market. If we allowed expatriate families to settle and rent homes, thousands of apartments would be occupied, and local markets would flourish, similar to what we've seen in Dubai and Riyadh,' he explained.
Oman's real estate sector currently struggles with a disconnect between strong government planning and the citizen's financial ability to keep up. While regulations have become more flexible, financial constraints remain the core issue—requiring joint intervention by the government and the banking sector to ensure the continuity of development projects and restore market balance between supply and demand.
In light of these challenges, proposed solutions such as expanding banking options, reducing government fees, and increasing population density through inclusive residency policies may offer new opportunities for this vital sector in shaping Oman's urban and economic future.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times of Oman
43 minutes ago
- Times of Oman
Oman's development project funding soars by 72% to OMR11bn
Muscat: Significant progress has been reported in implementing the Tenth Five-Year Development Plan (2021–2025), which aligns with Oman Vision 2040, the Ministry of Economy said on Saturday. Development project funding has surged by 72 percent to OMR11 billion compared to the initial OMR6.4 billion approved at the start of the implementation of the plan. This significant growth follows the completion and launch of numerous infrastructure and economic diversification initiatives across various service and social sectors. These efforts are supporting the Vision 2040 goals of comprehensive, balanced development by upgrading public services, improving infrastructure, and enhancing investment in all governorates. According to the Ministry, 95% of the plan's 412 strategic programmes are already underway, spanning 14 national priorities and covering all the key pillars of the vision. The Ministry said that all programmes related to the youth development priority have come into force. These programmes aim to govern and regulate the youth sector, enhance youth participation, and develop capabilities and skills of youth. All the three programmes implemented focused on governance, youth engagement, and skill development. All the programmes under the health priority segment like building hospitals, enhancing health coverage, and digital transformation are being implemented. The ministry further said that under the education and scientific segment 65 of the 70 programmes are active and include capacity building, governance reforms, career guidance, and innovation promotion. In the citizenship, heritage and culture segment 43 of the 45 programmes have been launched. These focus on tourism data systems, national talent training and international cultural events. In the social welfare segment 25 of the 26 programmes are operational and these include housing support, disability-inclusive festivals, sports promotion and social insurance sustainability efforts. The ministry further said that under the Economy and Development segment 152 programmes are underway, 98% of which are already being implemented. These include in areas like advanced urban services, community organisation roles in housing, land development for investment, and decentralised economic management. All the 17 programmes targeting the private sector, investment, and international cooperation are ongoing featuring loan guarantees, SME growth programmes and cost optimisation in the oil and gas sector. Under the information and communications technology (ICT) priority, all the 20 programmes related have come into effect. This includes the national digital economy strategy, smart city networks, cyber awareness campaigns and digital upskilling programmes. The flagship initiative 'Makeen' has trained over 8,200 Omanis through 126 sessions and set the groundwork for Oman's future tech talent hubs. Under the economic leadership and management priority, all the six associated programmes are currently being implemented. These include developing a more advanced and efficient public finance management system, establishing a national registry for government assets, creating an empowered and effective body responsible for coordinating economic decisions and preparing a national policy guide, and updating economic legislation to stimulate activity and enhance competitiveness. Additionally, 60 out of 62 programmes under the economic diversification and financial sustainability priority have entered the implementation phase. They include initiatives such as empowering startups in Fourth Industrial Revolution technologies, expanding national data centre and government cloud services, strengthening innovation and operational efficiency in public institutions, unified global software licencing management, reviewing government service fees, monitoring the performance and competitiveness of the logistics sector, and maximising local value in transport, communications, and IT projects. Other notable initiatives include support for national industries and Omani products, modernisation of financial legislation in the mining sector, updating the Mineral Resources Law, promoting investment in mining, developing a digital mining platform, enhancing local company and SME participation in the energy and mining sectors, and advancing digital transformation in government services. Regarding the labour market and employment priority, 17 out of 18 programmes are being implemented. These focus on drafting the National Employment Strategy, improving labour policies and legislation, implementing an effective nationalisation (Omanisation) mechanism, rolling out replacement-linked training initiatives, offering specialised entrepreneurship programmes in cooperation with relevant agencies, and cultivating a culture of empowerment for national talent in the energy and mining sectors. Under the Sustainable Environment pillar, a total of 56 programmes have been outlined, with 95% (53 programmes) already in implementation. These include key initiatives such as updating environmental policies and legislation, sustainable biodiversity management, a national strategy for chemical and agricultural soil conditioner management, regulation of pesticides and fertilizers, enhancement of palm productivity, the establishment of a national environmental monitoring and control system, development of a national environmental information system to support decision-making, and programs to support fishing vessels and equipment. In the governance and institutional performance segment, 54 programmes are aligned with its priorities. As of the first quarter of 2025, 87% are in execution. Notably, 13 out of 14 programmes in the legislative, judicial, and oversight areas have been launched—covering anti-corruption, public fund protection, oversight capacity-building, governance of national resources and projects, and improving civil aviation security in line with international standards. Within the public administration governance segment, 34 out of 40 programmes are currently active. These include ensuring governmental compliance, evaluating governance in state-owned enterprises, and developing legal, regulatory, and policy frameworks for the telecom and IT sectors. Other ongoing efforts include establishing a national innovation and change management system, an innovation lab for performance improvement, integration of e-government services, performance measurement systems, and upgrading the infrastructure and technical support for national networks. Regarding development projects currently being implemented during the Tenth Five-Year Plan (2021-2025), the Ministry of Economy said that notable progress has been made. In the infrastructure sector segment, Phase 1 of Sultan Haitham City is 80% complete, with Phase 2 at 45% completion. 25% of the structural planning for Greater Muscat, Salalah, Nizwa, and Haima have been completed. In the road sector projects indicated varied completion rates: Khasab–Daba–Lima road at 40%, Adam–Thumrait dualisation at 32%, Al-Amirat's Al-Joud Street at 79%, Dhofar's Darbat tunnel at 90%, Sultan Qaboos Street dualisation in Salalah at 81% and various other road projects ranging from 20% to 86%. In the social services sector, construction of health facilities is progressing strongly: Sultan Qaboos Hospital (Salalah) is 58% complete, Madha Hospital 86%, Suwaiq Hospital 77%, and other facilities such as Wadi Bani Khalid, Samail, Falah, and Namah Hospitals are progressing between 3% to 82%. The new Infectious Diseases Lab has reached 91% completion. In the education sector, 69 new schools are being built across the Sultanate, with an average completion rate of 50%. In the commodity production sector date palm weevil eradication has reached a completion rate of 80%, palm seedling productivity at 95%, desert locust control at 90%, agricultural and fisheries development at 59%, and animal disease surveillance at 95%. Fishing port infrastructure upgrades are ongoing and the completion rate includes Daba Port (86%), Kumzar Port (45%) and data preservation in the oil and gas sector and smart monitoring of mineral output are also underway. Finally, in the productive services sector, major projects are nearing completion: the Oman Botanical Garden (95%), municipal service improvements in Dhofar tourist areas (95%), coastal development in Shuwaymiyah and Taqah (20%), and multiple urban promenade and tourism marketing initiatives all contributing to enhanced service quality, tourism appeal, and housing aid delivery, with some projects like the housing assistance program achieving 92% completion
Times of Oman
4 hours ago
- Times of Oman
Oman reports major strides in implementing Tenth Five-Year development plan
Muscat: The Ministry of Economy has reported significant progress in implementing the Tenth Five-Year Development Plan (2021–2025), which aligns with Oman Vision 2040. Notably, development project funding has surged to OMR 11 billion, up 72% from the initial OMR 6.4 billion. This growth follows the completion and launch of numerous infrastructure and economic diversification initiatives across various service and social sectors. These efforts are supporting the Vision 2040 goals of comprehensive, balanced development by upgrading public services, improving infrastructure, and boosting investment in all governorates. According to the Ministry, 95% of the plan's 412 strategic programs are already underway, spanning 14 national priorities and covering all four pillars of the vision. A breakdown of program progress and objectives includes: - Youth Sector: All 3 programs implemented, focused on sector governance, youth engagement, and skill development. - Health Priority: All 6 programs in motion—building hospitals, enhancing health coverage, and implementing digital transformation. - Education and Scientific Capacity: 65 of 70 programs active, including capacity building, governance reforms, career guidance, and innovation promotion. - Citizenship, Heritage, and Culture: 43 of 45 programs launched, such as tourism data systems, national talent training, and international cultural events. - Social Welfare: 25 of 26 programs operational, with housing support, disability-inclusive festivals, sports promotion, and social insurance sustainability efforts. Under the Economy and Development pillar, 152 programs are underway, with 98% already being implemented. These include: - Advanced urban services, community organisation roles in housing, land development for investment, and decentralised economic management. - All 17 programs targeting the private sector, investment, and international cooperation are live—featuring loan guarantees, SME growth programs, and cost optimization in oil and gas. The ICT priority has activated all 20 programs, encompassing the national digital economy strategy, smart city networks, cyber awareness campaigns, and digital upskilling programs. The flagship initiative 'Makeen' has trained over 8,200 Omanis through 126 sessions and set the groundwork for Oman's future tech talent hubs. Under the Economic Leadership and Management Priority, all six associated programs are currently being implemented. These include developing a more advanced and efficient public finance management system, establishing a national registry for government assets, creating an empowered and effective body responsible for coordinating economic decisions and preparing a national policy guide, and updating economic legislation to stimulate activity and enhance competitiveness. Additionally, 60 out of 62 programs under the Economic Diversification and Financial Sustainability Priority have entered the implementation phase. They include initiatives such as empowering startups in Fourth Industrial Revolution technologies, expanding national data center and government cloud services, strengthening innovation and operational efficiency in public institutions, unified global software licensing management, reviewing government service fees, monitoring the performance and competitiveness of the logistics sector, and maximizing local value in transport, communications, and IT projects. Other notable initiatives include support for national industries and Omani products, modernization of financial legislation in the mining sector, updating the Mineral Resources Law, promoting investment in mining, developing a digital mining platform, enhancing local company and SME participation in the energy and mining sectors, and advancing digital transformation in government services. As for the Labor Market and Employment Priority, 17 out of 18 programs are active. These focus on drafting the National Employment Strategy, improving labor policies and legislation, implementing an effective nationalization (Omanization) mechanism, rolling out replacement-linked training initiatives, offering specialized entrepreneurship programs in cooperation with relevant agencies, and cultivating a culture of empowerment for national talent in the energy and mining sectors. Under the Sustainable Environment pillar, a total of 56 programs have been outlined, with 95% (53 programs) already in implementation. These include key initiatives such as updating environmental policies and legislation, sustainable biodiversity management, a national strategy for chemical and agricultural soil conditioner management, regulation of pesticides and fertilizers, enhancement of palm productivity, the establishment of a national environmental monitoring and control system, development of a national environmental information system to support decision-making, and programs to support fishing vessels and equipment. In the Governance and Institutional Performance pillar, 54 programs are aligned with its priorities. As of Q1 2025, 87% are in execution. Notably, 13 out of 14 programs in the legislative, judicial, and oversight areas have been launched—covering anti-corruption, public fund protection, oversight capacity-building, governance of national resources and projects, and improving civil aviation security in line with international standards. Within the Public Administration Governance Priority, 34 out of 40 programs are active. These include ensuring governmental compliance, evaluating governance in state-owned enterprises, and developing legal, regulatory, and policy frameworks for the telecom and IT sectors. Other ongoing efforts include establishing a national innovation and change management system, an innovation lab for performance improvement, integration of e-government services, performance measurement systems, and upgrading the infrastructure and technical support for national networks. As for development projects under implementation*during the 2021–2025 plan, notable progress has been made: - In the infrastructure sector, Phase 1 of Sultan Haitham City is 80% complete, with Phase 2 at 45%. The structural planning for Greater Muscat, Salalah, Nizwa, and Haima stands at 25%. - Road sector projects show varied completion rates: Khasab–Daba–Lima road at 40%, Adam–Thumrait dualization at 32%, Al-Amirat's Al-Joud Street at 79%, Dhofar's Darbat tunnel at 90%, Sultan Qaboos Street dualization in Salalah at 81%, and various others ranging from 20% to 86%. In the social services sector, construction of health facilities is progressing strongly: Sultan Qaboos Hospital (Salalah) is 58% complete, Madha Hospital 86%, Suwaiq Hospital 77%, and other facilities such as Wadi Bani Khalid, Samail, Falah, and Namah Hospitals progressing between 3% to 82%. The new Infectious Diseases Lab has reached 91%. In the education sector, 69 new schools are being built across the Sultanate, with an average completion rate of 50%. In productive sectors: - Date palm weevil eradication is at 80%, palm seedling productivity at 95%, desert locust control at 90%, agricultural and fisheries development at 59%, and animal disease surveillance at 95%. - Fishing port infrastructure upgrades are ongoing, with Daba Port (86%) and Kumzar Port (45%) undergoing improvements. Additionally, data preservation in the oil and gas sector and smart monitoring of mineral output are also underway. Finally, in the productive services sector, major projects are nearing completion: the Oman Botanical Garden (95%), municipal service improvements in Dhofar tourist areas (95%), coastal development in Shuwaymiyah and Taqah (20%), and multiple urban promenade and tourism marketing initiatives all contributing to enhanced service quality, tourism appeal, and housing aid delivery, with some projects like the housing assistance program achieving 92% completion.
Times of Oman
4 hours ago
- Times of Oman
Oman's tenth Five-Year Plan sees major development strides with $28.6 billion in allocations
Muscat: The Ministry of Economy has reported significant progress in implementing the Tenth Five-Year Development Plan (2021–2025), which aligns with Oman Vision 2040. Notably, development project funding has surged to OMR 11 billion, up 72% from the initial OMR 6.4 billion. This growth follows the completion and launch of numerous infrastructure and economic diversification initiatives across various service and social sectors. These efforts are supporting the Vision 2040 goals of comprehensive, balanced development by upgrading public services, improving infrastructure, and boosting investment in all governorates. According to the Ministry, 95% of the plan's 412 strategic programs are already underway, spanning 14 national priorities and covering all four pillars of the vision. A breakdown of program progress and objectives includes: - Youth Sector: All 3 programs implemented, focused on sector governance, youth engagement, and skill development. - Health Priority: All 6 programs in motion—building hospitals, enhancing health coverage, and implementing digital transformation. - Education and Scientific Capacity: 65 of 70 programs active, including capacity building, governance reforms, career guidance, and innovation promotion. - Citizenship, Heritage, and Culture: 43 of 45 programs launched, such as tourism data systems, national talent training, and international cultural events. - Social Welfare: 25 of 26 programs operational, with housing support, disability-inclusive festivals, sports promotion, and social insurance sustainability efforts. Under the Economy and Development pillar, 152 programs are underway, with 98% already being implemented. These include: - Advanced urban services, community organisation roles in housing, land development for investment, and decentralised economic management. - All 17 programs targeting the private sector, investment, and international cooperation are live—featuring loan guarantees, SME growth programs, and cost optimization in oil and gas. The ICT priority has activated all 20 programs, encompassing the national digital economy strategy, smart city networks, cyber awareness campaigns, and digital upskilling programs. The flagship initiative 'Makeen' has trained over 8,200 Omanis through 126 sessions and set the groundwork for Oman's future tech talent hubs. Under the Economic Leadership and Management Priority, all six associated programs are currently being implemented. These include developing a more advanced and efficient public finance management system, establishing a national registry for government assets, creating an empowered and effective body responsible for coordinating economic decisions and preparing a national policy guide, and updating economic legislation to stimulate activity and enhance competitiveness. Additionally, 60 out of 62 programs under the Economic Diversification and Financial Sustainability Priority have entered the implementation phase. They include initiatives such as empowering startups in Fourth Industrial Revolution technologies, expanding national data center and government cloud services, strengthening innovation and operational efficiency in public institutions, unified global software licensing management, reviewing government service fees, monitoring the performance and competitiveness of the logistics sector, and maximizing local value in transport, communications, and IT projects. Other notable initiatives include support for national industries and Omani products, modernization of financial legislation in the mining sector, updating the Mineral Resources Law, promoting investment in mining, developing a digital mining platform, enhancing local company and SME participation in the energy and mining sectors, and advancing digital transformation in government services. As for the Labor Market and Employment Priority, 17 out of 18 programs are active. These focus on drafting the National Employment Strategy, improving labor policies and legislation, implementing an effective nationalization (Omanization) mechanism, rolling out replacement-linked training initiatives, offering specialized entrepreneurship programs in cooperation with relevant agencies, and cultivating a culture of empowerment for national talent in the energy and mining sectors. Under the Sustainable Environment pillar, a total of 56 programs have been outlined, with 95% (53 programs) already in implementation. These include key initiatives such as updating environmental policies and legislation, sustainable biodiversity management, a national strategy for chemical and agricultural soil conditioner management, regulation of pesticides and fertilizers, enhancement of palm productivity, the establishment of a national environmental monitoring and control system, development of a national environmental information system to support decision-making, and programs to support fishing vessels and equipment. In the Governance and Institutional Performance pillar, 54 programs are aligned with its priorities. As of Q1 2025, 87% are in execution. Notably, 13 out of 14 programs in the legislative, judicial, and oversight areas have been launched—covering anti-corruption, public fund protection, oversight capacity-building, governance of national resources and projects, and improving civil aviation security in line with international standards. Within the Public Administration Governance Priority, 34 out of 40 programs are active. These include ensuring governmental compliance, evaluating governance in state-owned enterprises, and developing legal, regulatory, and policy frameworks for the telecom and IT sectors. Other ongoing efforts include establishing a national innovation and change management system, an innovation lab for performance improvement, integration of e-government services, performance measurement systems, and upgrading the infrastructure and technical support for national networks. As for development projects under implementation*during the 2021–2025 plan, notable progress has been made: - In the infrastructure sector, Phase 1 of Sultan Haitham City is 80% complete, with Phase 2 at 45%. The structural planning for Greater Muscat, Salalah, Nizwa, and Haima stands at 25%. - Road sector projects show varied completion rates: Khasab–Daba–Lima road at 40%, Adam–Thumrait dualization at 32%, Al-Amirat's Al-Joud Street at 79%, Dhofar's Darbat tunnel at 90%, Sultan Qaboos Street dualization in Salalah at 81%, and various others ranging from 20% to 86%. In the social services sector, construction of health facilities is progressing strongly: Sultan Qaboos Hospital (Salalah) is 58% complete, Madha Hospital 86%, Suwaiq Hospital 77%, and other facilities such as Wadi Bani Khalid, Samail, Falah, and Namah Hospitals progressing between 3% to 82%. The new Infectious Diseases Lab has reached 91%. In the education sector, 69 new schools are being built across the Sultanate, with an average completion rate of 50%. In productive sectors: - Date palm weevil eradication is at 80%, palm seedling productivity at 95%, desert locust control at 90%, agricultural and fisheries development at 59%, and animal disease surveillance at 95%. - Fishing port infrastructure upgrades are ongoing, with Daba Port (86%) and Kumzar Port (45%) undergoing improvements. Additionally, data preservation in the oil and gas sector and smart monitoring of mineral output are also underway. Finally, in the productive services sector, major projects are nearing completion: the Oman Botanical Garden (95%), municipal service improvements in Dhofar tourist areas (95%), coastal development in Shuwaymiyah and Taqah (20%), and multiple urban promenade and tourism marketing initiatives all contributing to enhanced service quality, tourism appeal, and housing aid delivery, with some projects like the housing assistance program achieving 92% completion.
