Why do we have so many vacant residential units?

With several new housing projects being announced frequently, many apartments in the capital remain sparsely occupied.

Khalil al Zadjali, head of Cavendish Maxwell Oman, in an interview with the Observer, stated that of the 38,000 residential units added to Oman’s market in 2024, around 15,500 were apartments in Muscat.

“With new units coming online, tenants often upgrade to newer, more modern apartments, leaving older units vacant and listed for rent, leading to a high number of “to let” signboards in the city. It takes time for both new and existing units to be rented out, which can increase the apparent vacancy rate, even though overall occupancy remains high,” he explained.

The overall occupancy rate of over 80 per cent is an average across the residential sector and does not reflect differences between locations, building ages and property types.

Al Zadjali added, “If demand remains strong for newer or better located developments, some areas and older buildings may experience higher vacancy rates. This dynamic turnover and ongoing addition of new supply can make vacancies more visible, even in a generally healthy market.” There is a growing demand for apartments in new downtown areas emerging across Oman. These developments offer a modern lifestyle with easy access to amenities, making them attractive to both Omanis and expatriates seeking urban living experiences.

Regarding the demand for business properties, Al Zadjali noted, “Demand remains steady, especially in urban centres and newly developed commercial districts. Government initiatives under Oman Vision 2040 aim to diversify the economy and attract international investment, leading to interest in modern office spaces, retail outlets and commercial properties.”

This article was originally published in Oman Daily Observer.