Like many neighboring markets including the UAE and Egypt, the real estate sector in Bahrain underwent a period of solid growth in 2021.
Real estate transaction values in Bahrain hit one billion dinars (USD 2.7 billion) last year, surging by a staggering 46 percent year-on-year, data from the Survey and Land Registration Bureau (SLRB) and the Real Estate Regulatory Authority (RERA) showed.
GOVERNMENT INITIATIVES TO BOOST INVESTMENT
Hailed as one of the dominant driving forces of this growth, recent government initiatives such as the National Real Estate Plan 2021-2024, will continue to attract higher levels of investment to the sector moving forward, which will aid in sustaining the momentum created throughout 2021, Savills reported.
First revealed by the government in March 2021, the four-year National Real Estate Plan 2021-2024 aims to improve the transparency and security of the real estate market in Bahrain by promoting investment into the sector, safeguarding stakeholders’ rights, and nurturing new and innovative real estate companies.
In line with this initiative, the government further showed commitment to boost the Kingdom’s economy in October last year, via the announcement of a new national economic growth and fiscal balance scheme. Seeking to increase Bahrain’s long-term competitiveness, the five-pronged approach will be carried out over several years and will represent one of the most ambitious economic reform programmes in the country’s history.
THE MARKET REMAINED STABLE OVER 2021
In the final quarter of 2021, offshoots of a gradual recovery in the market were already visible, as the Q4 2021 Savills Residential Capital Value Index remained stable, Swapnil Pillai, Associate Director for Research in the Middle East said.
With prices across the residential sector remaining unchanged across apartment and villas for two consecutive quarters, there is evidence to suggest that the initiatives introduced by the government over the course of the past year have so far been successful in achieving their aim of brining market stability.
Nevertheless, when compared with the same period in the previous year, prices in certain asset classes such as apartments and villas have dropped by 1.6 percent and 4.2 percent respectively, and otherwise remain on average across the board.
On a quarterly basis, the residential rental index for Q4 2021 remained largely stable yet did witness some negative change at the mid-to-high end of the market, with apartment rents in these sectors dropping by 3.5 percent and 1.4 percent, respectively.
“Looking ahead, we anticipate the high-end sale market will continue to witness delays in absorption with developers unwilling to revise their pricing strategies. However, they are still offering extensive incentives with many developers also partnering with banks to offer attractive mortgage products,” Hashim Kadhem, Head of Professional Services, Bahrain, said.
