Real Estate Market in Bahrain: The key sectors.
Last week, you will remember, we ended our communication with you on a positive note. The Bahrain real estate market, we said, will definitely go up and there are reasons, we stressed, for why we believe in that fact – none bigger than the fact that, as one of the Kingdom’s leading real estate agencies, we know what we are talking about.
So, this week, we shall elaborate a little on the points we made. But, before that, we shall take a look at the key sectors in Bahrain’s real estate so that we can help you get a handle on how things stand, how they got to where they are and the market’s prospects going forward.
What are the different sectors in Bahrain’s real estate market? In a nutshell: Residential, retail, office and industrial and hospitality. And how have they fared recently?
Put simply: Not very well, in recent years. According to its first Bahrain Property Market Report for 2018-19, Cavendish Maxwell, a leading property consultancy and chartered surveying firm in the Middle East, pointed out that residential prices and rents in the Capital, Northern, Southern and Muharraq Governorates generally declined. In addition, commercial office space, the report said, mirrored the trend.
But the retail and tourism sectors, a senior consultant with Cavendish Maxwell added, “… continue to be the most stable, boosted by numerous entertainment, leisure and retail events available to visitors and residents.”
Perhaps, that was the reason why, despite all the negative factors trying their best to impact this sector adversely, the real estate market – a significant contributor to the Bahraini economy – shrugged all of them off and, according to a report by the Oxford Business Group, in 2017, posted its strongest growth rate in years (although it slowed down again in the first half of 2018).
Now – and buckle up for this, because it gets interesting, yet topsy-turvy because … well … that’s what happens when cold, hard statistics wrestle with the hot reality on the ground – despite the sector’s value added being worth BD507m (US$ 1.3b) (according to the Information and e-Government Authority, per Oxford Business Group); despite this being equivalent to 3.8% of the Kingdom’s GDP that year; and, according to the Bahrain EDB, despite the fact that the real estate sector grew by 3.4% over the first half of 2018 (with the number of real estate transactions going up 7%), the value of sales actually fell by 16% over this period, dropping to BD445m!
We’ll explain what happened. According to the OBG (that’s the Oxford Business Group, in case you forgot!) report, this drop was driven by a 22% fall in purchases by Bahraini citizens, to BD389m while – if you’re a foreign investor eyeing the Bahrain real estate market, pay attention – sales to foreigners rose.
What does this mean? It means exactly what we explained last week – on this same ASK-page, same ASK-day – that Bahrain is the best place to do business in the Gulf; that its business-friendly climate makes it a good place to set up shop and, if you’re a foreign real estate investor, now is the time to head to this beautiful island nation and invest in property, or projects – or simply set up an endeavor of your own.
This is the time to do it. And, Bahrain, with all that it offers, is the ideal destination if you’re looking to make a profitable investment.