Bahrain’s Real Estate Sector Shows Resilience in the Face of Challenges
In the bustling city of Riyadh, Bahrain’s real estate sector has proven its stability in the first quarter of this year. Despite a marginal 3 percent year-on-year decline in sales transactions, the market remains robust with 6,124 transactions recorded. An analysis by real estate services firm Savills revealed that the value of transactions also saw a slight drop of 1.2 percent to $2.92 billion in 2023 compared to the previous year.
Continued Growth and Government Support
Despite the challenges faced, the volume of real estate transactions in Bahrain grew by an impressive 24.1 percent in 2023 compared to the previous year. Hashim Kadhem, head of professional services at Savills, attributes this growth to government support, rising investor confidence, and a growing demand for real estate in the region.
Changing Market Dynamics
Home buyers in Bahrain are showing a shift towards strategic purchasing, focusing primarily on mid-range properties. The market has also seen a rise in more affordable housing options with improved amenities, favoring tenants. Luxury waterfront properties continue to attract buyers seeking exclusivity and comfort, driven by Bahrain’s coastal location and thriving high-end tourism industry.
Anticipated Impact on Capital Values
With a stream of projects expected to be completed this year, the gap between demand and supply may widen, potentially affecting capital values in the short term. The report indicates a slight growth of 0.3 percent in apartment capital values in the first quarter of this year, while high-end villas experienced a 4.5 percent dip compared to the same period last year.
Office Sector Trends
The office sector in Bahrain witnessed a quiet period in the first quarter of this year, with businesses opting to renew leases in high-quality Grade A properties. Capital values for these properties remained stable, driven by an increase in supply. Co-working spaces also saw high demand, particularly from startup companies and businesses looking to downsize.