Bahrain is one of the smallest countries in the GCC in terms of area. And one of the leading countries in the region in terms of development and economy diversification.
The non-oil sector has been driving the economic growth in Bahrain for more than four years now.
The real estate market, the tourism sector and the banking sector have been as important to the economy as oil, or even more so, and have largely contributed to the GDP of the kingdom.
So how does the real estate market in Bahrain look like this year?
Let’s take a look.
Rents in the residential sector are showing more stability this year in Bahrain. There have been some worries about oversupply in the market last year. This oversupply has caused prices to go down by 11% over 2017. However, residential properties in Bahrain displayed for rent are showing more stability this year.
Although the demand might appear as if it exceeds the supply, the truth is that most of this supply is geared towards high-end upscale residential properties. The government is currently addressing this issue with housing programs.
Nonetheless, it is noteworthy to mention that villas for rent have outperformed apartments for rent in the market over the last year. So it seems like demand is still high for established first class communities with first rate facilities.
According to a report recently issued by Cluttons Bahrain, the residential market is showing stability now and will most probably remain stable for the rest of this year.
Office rentals are not doing great so far in Bahrain. Albeit last year has seen great multinational companies choosing to make Bahrain their regional hub, such as Amazon.
But still, the demand for office properties in the Kingdom remains a little low. The only office spaces that see high demand in Bahrain are shell and core spaces.
Thanks to Tamkeen Initiative though,start-up businesses are thriving in the kingdom. So, hopefully office spaces will see a better year in 2018.
According to Cluttons Bahrain, 500,000 square meters of new retail space are expected to be delivered across the Kingdom of Bahrain this year.
The retail sector is still a very significant contributor in Bahrain’s real estate market. Retail rentals have remained stable over the last six months across all location in the Kingdom. And retail rental rates are likely to remain strong in 2018.
Moreover, retail developments are starting to flourish in many of Bahrain’s established residential areas such as Juffair.
As the demand builds for self-sustained communities, and more an more tenants look for residential areas with well-developed retail centers, we can say that the retail sector is largely playing a role in the development and growth of the residential sector.
While affordable housing developments and office spaces may need a little push, it is safe to say that the real estate market in Bahrain is mostly stable and very likely to remain stable over the upcoming year.