Oman reaps fruits of go-slow plan

Dubai: Oman is taking things slowly when it comes to development. And it is an approach which seems to be working well for its property developers.

While its neighbours have developed housing at a blistering pace in recent years, Oman has just begun to open up to foreign buyers wanting the sun and sand of the Middle East without the over-the-top skyscrapers and often crass commercialism.

Oman has embarked on a gentle modernisation programme which includes a 2006 royal decree allowing expatriates and foreign nationals to purchase land and property within the sultanate in "tourist designated areas" for accommodation and investment. It's a law that has been carefully constructed to help elevate the country slowly but surely into the international arena.

There are currently five areas where foreigners can buy in Oman.

These include The Wave, Muscat, Al Madina a'Zarqa, Muscat Hills Golf and Country Club, Muriya and Barr Al Jissah. Several more developments are due to released over the coming 12 months including the prestigious Malkai project, set to become the sultanate's most exclusive resort destination. Only projects which have passed the strict criteria laid down by the government, in terms of enhancing Oman's tourist growth, can sell to foreigners.

According to Christopher Steel from the real estate company Savills, it is this gentle, thorough approach which is continuing to attract buyers.

According to Steel, Oman's developments are aimed at end users who want a permanent or holiday home. And it's a location that is attracting interest from people who are eager to take their foot off the lifestyle accelerator.

Michael O'Connell, head of research at Hamptons International, agrees, pointing out that there are many advantages for foreigners buying in Oman. He highlighted the fact that the sultanate has worked hard to create the right climate for new investment by developing a free competitive economy with equal opportunities for all and shaping laws and regulations to encourage enterprise.

These include a free economy system, no personal income tax, no restrictions on capital and profit transfers together with freehold ownership rights for expatriates.

With property prices for integrated tourism complexes ranging from $1,700 (Dh6,252.60) to $7,000 per square metre, O'Connell says Oman has not been adversely affected by the current global economic climate. "Some changes are taking place but they are slight. With the residential market having entered a new period of price correction ... we have noted a small decline for residential properties. In turn, this has slightly reduced rental prices," he says.

"While no developer is releasing primary stock at present, we expect this to change over the next two quarters, with an emphasis on bringing affordable stock to the Oman market. It is a good choice, therefore, for mid- to long-term investors rather than those looking for short-term gains."

Maintaining a low profile has worked in Oman's favour, according to James Gonzalez, market analyst at Obelisk Investment Property.

The sultanate, Gonzalez says, is considered to be a 'real Arabia' by many and is keen to learn from what it sees as the errors accompanying the over development in other markets and has aimed at the select end of the property investment market.

"Oman's property market is one of the youngest in the region. So it's an emerging market but targeted at the higher, luxury end," Gonzalez says.

"This, together with limited and controlled development is likely to ensure that Oman property development investment remains exclusive."

It all sounds good, particularly considering the downbeat forecast for residential property in the rest of the world.

But what are the downsides of buying in Oman if you are a foreigner.

None, according to Savills' Christopher Steel. He says that Oman has the most advanced freehold ownership legislation of any country in the region.

"It was," he says, "the first country to ratify freehold ownership, together with residency rights, so anyone who buys in Oman can be assured that there are clear and concise laws governing their ownership and living rights."

The author is a freelance writer based in Dubai.