Since 2023, there has been a clear trend: foreigners investing in Dubai have become more likely to direct their interests more widely to other emirates and neighboring countries of the Arabian Peninsula: Saudi Arabia, Bahrain, Qatar and, in particular, Oman.
About the country. "Everything is for people!»
The rich, now prosperous state of Oman is a rare example of an autocracy with a human face. Sultan Qaboos bin Said, who came to power in 1970, used the dollars flowing from the well so competently that in half a century he turned a backward poor country into its complete opposite. Qaboos is often compared to Singapore's reformist Prime Minister Lee Kuan Yew, as the scale of transformations is huge: first-class roads were laid from scratch, hundreds of schools and 9 universities were opened (before Qaboos there were 3 schools in the whole of Oman, not to mention universities), hospitals, polyclinics were built, the media appeared, slavery was finally abolished, finally.
The majestic Sultan Qaboos Mosque, built surrounded by gardens in Muscat, has become a kind of symbol of Oman's renaissance. Until 2006, it was the largest in the world (then it was overtaken by the mosque in Abu Dhabi).
The monarch's foreign policy was no less outstanding than his domestic one. Under him, the country adhered to neutrality in relations with other states, but repeatedly acted as a mediator in negotiations between the warring parties (the United States and Iran, the Yemeni Houthis and Saudi Arabia), inclining the region, which is not the most calm, to put it mildly, towards peaceful solutions. The Sultan has gained great prestige in the Middle East and in the world. Suffice it to say that the UAE, which has long had strained relations with Qaboos, declared three days of mourning after his death in 2020.
Haitham bin Tariq Al Said, who was the Minister of Culture under the Qaboos, became the Sultan's successor. He promised to continue the policy of his extraordinary predecessor, who is revered in Oman in much the same way as Ataturk in Turkey.
The life of the country's population is quite prosperous. Citizens are exempt from taxes, do not pay utilities, receive free medical treatment and study. The salary level is very high here. In addition, every Omani receives a land plot from the State upon reaching the age of 18. The concern also extends to refugees from neighboring Yemen, who are being resettled in social housing.
Tourism sector
Oman has been hosting tourists since 1987. The main destinations for recreation are the capital Muscat on the shores of the Gulf of Oman and the resort of Salala about a thousand kilometers east of Muscat on the coast of the Indian Ocean. Both of these regions are being built up with hotels and residential complexes, attracting international investors.
In 2020, Oman announced the country's Vision 2040 development plan, in which one of the key roles is assigned to tourism. Six new airports will be built in the Sultanate in the next 5 years. The authorities plan to increase the tourist flow from the current 17 million to 40 million per year by 2040, and the sector's share in the economy should grow to 10%.
In 2023, the country received 41% more foreign visitors than in 2022. Most tourists come from the UAE, India, Pakistan, Saudi Arabia and Iran.
Strategically, it became important for Oman to develop other sectors of the economy, in addition to the extraction and processing of hydrocarbons, as it became clear that the subsoil reserves would not last for a long time.
What is good about Oman?
The natural beauty and diversity of the landscape. Mountains are adjacent to the ocean, rocky shores are replaced by wide sandy beaches, the desert turns into tropical areas reminiscent of Southeast Asia. Visitors to Oman are surprised to find that there is much more greenery here than in Dubai. Traveling around the country, you can visit caves, see canyons, waterfalls, lagoons with flamingos and pelicans, even fjords. The highlight of Oman is the wadi valleys between the Hajar Mountains, overgrown with lush vegetation in summer and partially filled with water in winter.
The holiday season is almost all year round. The climate in Salalah is strikingly different from Dubai. In summer, the resort receives tropical rains. The ocean is choppy in July and August, and you can't swim in it. The most comfortable time to visit is from October to May. In Muscat, the climate is generally similar to the Emirates, but milder: in summer it is not so extremely hot, and in winter it is warmer.
The soft, non-aggressive appearance of cities.. White low silhouettes of houses, without skyscrapers and glass facades. Even new buildings are being built here according to the canons of classical Arabic architecture.
A safe environment. Oman is regularly ranked among the top five safest countries in the world. In 2024, he is in 5th place, according to the Numbeo rating.
The mores are quite free for an Arab country. The Omanis themselves wear their national clothes, both women and men. But foreigners walking around in shorts or off-the-shoulder tops are treated calmly. You should dress more strictly if you plan to visit villages in the interior of the country. People there are more conservative.
In general, the atmosphere can be judged by the position of women in society. They are free to control their fate, study, get married, choose a job, vote and be elected to government themselves. There are ladies in the government, for example, the Minister of Education and the Minister of Higher Education.
Unmarried women also visit the country quietly.
Separately about alcohol. There is no such strict attitude towards the consumption of alcoholic beverages by foreigners, as in Saudi Arabia, in Oman. Alcohol is acceptable for tourists or expats in hotels and restaurants. However, they charge exorbitantly for it, and it is absolutely impossible to appear drunk on the streets.
The Omanis are friendly and hospitable. The inhabitants of the country are mostly rich and happy with their lives, they welcome foreigners.
The infrastructure is on the level. There are international schools and many British educational institutions. Excellent quality highways cross the country, airports are being built and modernized, shopping malls with world brands are operating.
Who buys real estate in Oman?
The country allowed foreigners to purchase real estate only 3 years ago. Moreover, in six special zones (they are called ITC, integrated tourist complexes), citizens of other countries can make a purchase in full ownership. There are also projects offering leasehold leases for 50 years with the possibility of extension up to 99 years.
The development of projects focused on external demand began relatively recently, so there are not many of them, and they are all in top locations!
Interest in Oman is growing before our eyes. 90% of foreign buyers: Iranians, British, Germans, French, Poles, Americans, Russians. Over the past couple of years, there have been several events in Russia where Omanis have exhibited their projects.
What is good about Oman for an investor?
Low entry threshold. House prices are about 40-50% lower than in the UAE, Qatar, Bahrain. The average budget for a studio in a good complex under construction by the sea is $150,000. As in other foreign countries, customers apartments in new buildings interest-free installments are offered until the end of the construction of the house, that is, for 2-2.5 years. The initial payment is small: from 10-12%.
Residence permit for the purchase of any property, regardless of its value. For comparison: in the UAE, a two-year resident visa requires investments of $205,000, in Qatar from $200,000, in Saudi Arabia from $ 1 million.
In fact, in Oman, in order to issue a residence permit for the main applicant and his/her family members, including children and parents, it is enough to pay an initial installment payment, that is, 10-12% of the cost of the object.
Major international players have entered the market, such as Marriott, Tramp. The country has hotels of almost all major global brands: Hilton, Kempinski, Sheraton, Shangri-La, W Hotels, InterContinental, Radisson, which speaks in favor of the country's prospects as a magnet for tourism.
An unheated market with good investment returns. Rental yield: on average 8-10% per annum, hotel rooms: 10-12%. Expected return on capitalization growth: from 5 to 20%, depending on the project.
Prices have already increased by 4-8% over the year, in hotel complexes such as Marriott, Tramp,– by 10-12%.
There is little supply on the market, which creates a prerequisite for price increases. Mass construction began only 3 years ago, and the supply has not kept pace with the growing demand. There is not enough high-quality housing, and the hotels are overcrowded. Even hotels sublet apartments and villas from the owners in order to rent them out daily.
Low taxes
0% income tax, including income from renting out housing.
0% inheritance tax.
When purchasing real estate from a developer, 5% VAT is paid. It is usually divided evenly into all installment payments. In addition, a 3% registration fee is provided.
Escrow accounts. As in Dubai, the financing of projects in Oman takes place through escrow accounts, which protects the investor from losses associated with possible financial problems for the developer.
The fastest growing economy among the six countries of the Persian Gulf. Growth of 4.3%. GDP amounted to about 115 billion dollars, and GDP per capita was 25,000 dollars. Foreign direct investment in Oman in 2022 amounted to 4.8% of GDP.
Is it difficult for citizens of Russia, Belarus to buy real estate in Oman?
Oman is one of the "friendly" countries where transactions with Russians and Belarusians are technically quite easy. You can open an account in banks.
It is also important that there is a direct flight connection between Moscow and Muscat. Oman Air has announced that it will strengthen its flight program to Russia from October 2024, adding 3 more flights per week.
Real estate in Oman. Projects and prices
The interests of international investors are concentrated in two regions: Muscat and Salalah.
Muscat The capital of the country, located at the foot of the Hajar Mountains and stretching for 60 km along the Gulf of Oman. It is both the main resort and the main business center of the sultanate. In the Middle Ages Muscat rose as the largest producer of incense from Boswellia resin, as well as as a port from which it was convenient to get to Persia and India. It was as a transit point that the Omani capital was perceived in the 15th century by the Tver merchant Afanasy Nikitin, who went east "across three seas", trying to improve his trading affairs.
In Muscat, they purchase both tourist accommodation – apartments or hotel rooms in branded multifunctional complexes, as well as houses for living or long-term rental. Both types of real estate are in demand.
For living, you can consider a complex with excellent infrastructure and species characteristics closer to the mountains. For example, in the family-oriented Uptown Muscat complex located in the Al Seeb district, a 1-bedroom apartment can be purchased for just 120,000 euros.
In the elite segment, everyone knows Trump International Hotel is a large-scale project with golf courses, a private club, a nightclub, and a spa center. Hotel rooms are listed for 330,000-350,000 dollars.
The Great Escape complex is being built at an altitude of 130 meters next to the Aida Hotel and the Trump International Golf Course. The highlight of the facility is an infinity pool on the edge of a cliff, an ultra-modern fitness center and many other amenities. A 2-bedroom apartment is on sale for $330,000.
Salala A resort in southern Oman near the border with Yemen, the administrative center of Dofar province. In the south of the region there are magnificent beaches with snow-white sand, as well as picturesque lagoons. In the north, mountains with waterfalls and bizarre canyons are a tourist attraction.
The climate in this part of the Arabian Peninsula is especially unusual. The monsoon makes it humid, which is why there is a lot of tropical vegetation. Residents of the Persian Gulf come to Salalah for the summer to take a break from the sweltering heat in their homeland. Europeans, on the contrary, prefer not to fly in the summer months, since in June-September the ocean is restless, and you can not swim.
You can get to Salala by highway from Muscat (about a thousand kilometers), by air and by sea.
The resort has many world-class hotels, shopping malls, and good international schools.
Resort accommodation is common in Salalah. Apartments or hotel rooms are purchased here for rent to vacationers.
The monopolist – world-class developer Amazi is engaged in the development of projects in Salal.
A studio with an area of 50 sq. m. m in The Sustainable City – Yiti complex can be bought for 144 000 dollars. A four-bedroom villa is also offered there for $621,000. Apartments on the secondary market are significantly cheaper.
Summary
We recommend Oman to those who are not afraid to explore new markets. Of course, the country occupies a peripheral position in relation to the UAE, although it is larger in size. However, the niche that the sultanate has chosen for itself is clear, and the facts speak for themselves.
Thanks for the help in preparing the material from our experts in Oman: Katerina Pleshko and Natalia Mukhamedzhanova, agency MGS.
Sources:
https://lenta-ru.turbopages.org/turbo/lenta.ru/s/articles/2020/01/17/arabian_norway/
https://www.omanobserver.om/article/1154045/oman/oman-to-have-six-new-airports-by-2029
https://www.nzherald.co.nz/world/oman-names-culture-minister-as-successor-to-sultan-qaboos/D4X63AZN2O2ZTDCAUQQA6DP734/
https://expert.ru/v-mire/stavka-na-zelenoe/
Photos used: Depositphotos.com
