Decree aims to ban real estate deals in strategic areas
Last month, the Ministry of Housing announced that non-Omani land owners, who own lands in certain areas of Oman, have two years to transfer their lands to locals or they could face legal action.
“All non-Omani land and real estate owners whose properties are located in the prohibition areas as stipulated in Articles 1 and 2 of the Royal Decree No. 29/2018 should conform to the provisions of the law no later than November 19, 2020; after this date, legal procedures will be implemented,” the ministry said.
Article 1 of the decree prohibits non-Omanis from owning plots and real estate for all its uses in any of the following places: the Governorates of Dhofar, except Salalah, Musandam, Buraimi, Al Dhahirah, and Al Wusta; the wilayats of Shinas, Liwa, and Masirah; all mountainous areas of strategic importance; islands; and sites near palaces, and security and military authorities.
Abdullah Alawi Al Dhahab, real estate expert in Dhofar with more than 26 years of experience, told Times of Oman how this decision has affected investors in the region.
“This decision came after a series of previous decisions and is an extension of previous laws issued by the Ministry of Housing; this has led investors to question the status of real estate in Dhofar,” he said.
“Perhaps the aim of the Decree is to ban real estate in some areas, such as border areas and away from symbolic places such as palaces, military, and security zones,” Al Dhahab added.
According to Al Dhahab, this decision will help combat investors who cheat the law by buying white (empty) lands without building on them. “What has become clear is that many investors were investing in empty lands for long terms, while waiting for large projects before beginning to construct,” Al Dhahab said.
“Investors would wait for decisions that serve the tourism sector in Dhofar. People invest with the belief that Dhofar’s portfolio will soon grow. Therefore, they only buy empty lands so that if the area coincides with a major development plan, they have places they can build on,” he added.
Many Gulf investors have contributed so much to urban growth; as a result, many GCC citizens have expressed their concerns to real estate managers in Dhofar.
“In some areas such as Al Dhahriz in Salalah, GCC citizens have contributed up to 70 per cent to the development of buildings in the area. I have received calls from people all over the Gulf asking me about this decision and if they will be affected. This is an important issue.”
Al Dhahabi agrees with the decision to ban non Omanis from owning white lands but thinks that the real estate market will benefit more from allowing GCC citizens to own existing apartments.
The legislator should consider allowing GCC citizens to own existing apartments in areas outside Salalah, such as Taqah, Mirbat, and Thumrait, as doing so will encourage construction and real estate activity in these areas.
Contrary to the general view, Ahmed Hassan, a real estate and investment specialist in Dhofar, does not agree that this decision will lead to more prosperity in the area.
“I do not think that the value of real estate will increase because of the current economic condition. However, this decree is very important and has come at the right time. All Omanis must take note of their lands because they will not find replacements,” Hassan said.
“This law only applies to GCC citizens, other nationalities could never buy properties expect in two or three places in Muscat, and one place in Salalah,” added Hassan.
A new addition to the law is penalties for people who try and cheat the system. “For instance, if a GCC citizen has a property but writes it under the name of an Omani citizen, the law considers this a violation, and the Omani as an accomplice when caught. Sadly, this does happen, and this decision will help combat such acts,” said Hassan.