By Oman’s property market is being carried not by big-ticket investors but by first-time buyers in their twenties and thirties. Sale contracts climbed 7 percent to roughly 34,000 properties in the first half of 2026, even as regional war scared off many foreign buyers, and the Oman real estate market 2026 story is increasingly being written by young Omanis armed with subsidized mortgages.
- Sale contracts in Oman rose 7 percent year on year to about 34,000 in the first half of 2026, according to National Center for Statistical Information data, even as the Iran-US-Israel conflict cooled interest from foreign buyers.
- Oman Housing Bank is offering first-time buyers a subsidized 2 percent mortgage rate against roughly 3.5 percent at commercial lenders, while the Central Bank of Oman’s average lending rate fell to 3.5 percent between January and June.
- GCC buyer inquiries dropped by nearly a quarter, but officials expect demand to recover in the second half of the year as new off-plan projects launch under the Golden Residency program.
Cheap Money Is Pulling In First-Time Buyers
Mortgages signed in Oman rose 26 percent year on year through June, according to the National Center for Statistical Information, and brokers say the driver is straightforward: money has never been cheaper for first-time buyers. Oman Housing Bank offers a 2 percent subsidized rate to Omanis buying their first home, well below the roughly 3.5 percent charged by commercial banks, while the Central Bank of Oman’s own average lending rate slid to 3.5 percent in the first half of the year.
“Lower interest rates have encouraged more young people to buy properties so far this year, while many investors have cooled off,” said Amal Al Jahdhami, sales manager at Rikaz Real Estate Development. That shift in who is buying, from seasoned investors to first-time owner-occupiers, is reshaping demand toward smaller, more affordable units rather than the larger investment-grade properties that dominated previous cycles.
Regional War Keeps Foreign Investors on the Sidelines
The same conflict that has disrupted oil flows through the Strait of Hormuz and battered Kuwaiti refineries has also chilled appetite among foreign and GCC buyers for Omani property. Balqees Al Kindy, chief operating officer of O Homes, said her firm has seen a marked pullback. “We did not have many inquiries from expatriates and international investors this time, mainly because of the Iran war,” she said.
That represents a nearly 25 percent drop in GCC buyer interest compared with a typical period, brokers say, even as domestic demand has more than made up the difference in transaction volumes. It is an unusual split for a Gulf property market, where cross-border and expatriate capital has traditionally driven headline sales figures.
Oman is not alone in courting foreign capital through residency incentives. The UAE and Saudi Arabia both run their own long-term residency schemes tied to property and business investment, and competition among Gulf states for mobile wealth has only intensified since regional tensions escalated earlier this year. What sets Oman apart for now is that its market has kept growing in transaction volume even without that foreign money, a sign that the domestic buyer base built up through years of subsidized housing policy is now large enough to carry the market on its own.
Still, brokers caution against reading too much into one strong half. Salalah and Muscat continue to see the bulk of activity, and a prolonged regional conflict could eventually weigh on Omani household budgets too, even if the immediate effect has been to redirect demand toward safer, domestically financed purchases rather than eliminate it altogether.
What Comes Next: Golden Visas and New Cities
Officials are betting that the lull in foreign demand will be temporary. Oman’s Golden Residency program, launched in August last year, grants renewable five- and ten-year residency permits to foreign investors, entrepreneurs and retirees who invest between 250,000 and 500,000 Omani rials, or roughly $650,000 to $1.3 million, in property, business, bonds or shares. About 56,000 people have applied since the scheme launched, according to official figures.
“Demand for off-plan properties will rise in the second half of this year as new projects come under construction after the announcement of the golden residency law,” said Rihab Al Mayahi, director of social housing and projects at the Ministry of Housing and Urban Planning. The largest of those projects is the $2.6 billion Sultan Haitham City in Muscat, which spans nearly 14.8 million square meters and is one of several major developments Oman has unveiled this year.
Not every signal points the same way, however. Mustafa Hussein, owner of Property Shop, warned that regional conflict is already pushing up the cost of building materials such as bricks, cement and steel, which could squeeze developer margins and lift off-plan prices even if buyer demand cools. Combined with sustained mortgage support and the golden visa pipeline, the Oman real estate market 2026 outlook looks less like a boom and more like a durable, first-buyer-led recovery, one that has held up despite a war on the country’s doorstep.
That resilience places Oman alongside, rather than in the shadow of, its larger Gulf neighbors, where property markets have moved in different directions this year. The UAE’s real estate market cooled in the second quarter of 2026 even as Oman’s transaction volumes climbed, a reminder that the region’s property story is no longer a single narrative.
Read next: what the UAE’s cooling Q2 property data means for buyers and investors across the Gulf.
Sources: AGBI, National Center for Statistical Information.