As the island kingdom has been making steady steps towards economic recovery, it has also been carving out a reputation for itself in GCC’s (Gulf Cooperation Council) real estate sector as a desirable property investment location.
While much of the international publicity has been focused on Dubai and Abu Dhabi, Bahrain’s strong, steady performance over the last 10 years has raised a lot of positive expectations around the kingdom’s local property market.
Property prices are still rising. Compared to 10 years ago, prices have increased by 100% in some areas, especially those where full ownership has been enabled for foreigners.
Construction pace is still on the rise with a number of large-scale real estate projects having been launched in the kingdom this year. The building & construction sector saw 6.9% growth in its contribution to Bahrain’s GDP in 2015, and 2016 data is predicted to show an accelerating growth rate.
Predicted to reach BHD1.2 billion by the end of this year, the value of real estate transactions is set to have remained stable compared to 2015, despite economic fluctuations and low oil prices.
Economic development on track
Serious measures were taken by the Bahrain government to lay solid foundations for significant modernization and sustainable growth of the national economy. New laws were approved, opening the door for foreign investments to pour into the country, including the latest amendment to the Business Companies Law, which enabled non-nationals to establish companies in different economic sectors. As a result, the number of newly issued commercial registrations hiked during the first half of 2016 to reach 13582, compared to 8395 in 2015.
In 2001, another decree was issued by the Bahrain government defining certain districts, such as Juffair, Seef and several others as property freehold areas. The property freehold decree shifted the national real estate market to a totally new horizon marked by high investment rates and increased construction activity.
The government efforts keeping the economic development process on track aren’t restricted to changes to the law and property ownership regulations. Other steps included the founding of the Economic Development Board (EDB), creating a ministerial committee concerned with settling stalled real estate projects and improving the quality of infrastructural services provided around the kingdom.
New mega projects
As a result of the strong appetite for investment in Bahrain, several mega projects have been rolled out lately in different economic sectors, mainly real estate.
Several heavyweight projects were initiated this year, including Abdullah Medical City, known to be the first ‘medical city’ of its kind in the region.
Another project, “Vision Tower”, was launched in Juffair by Bahrain’s leading developer, KBC. The tower contains more than 120 residential units over 27 floors.
Infrastructure also witnessed major ventures including the $1.1 billion expansion works at Bahrain International Airport and the new BHD250 million gas terminal.
In the short term, Bahrain is anticipated to see a 5% to 10% rise in real estate trading value by next year as a result of two main catalysts.
The first is the new real estate investment law, which is set to see the light of day by the first half of 2017. Second, Bahrain local property market is poised to see the introduction of relatively new real estate products varying between hotel apartments, warehouses, and industrial units.
Bahrain real estate transformation is happening on a slow beat but in steady moves. The whole country’s landscape is adapting a totally modern shape on all aspects starting with laying down progressive regulatory framework, and moving on to infrastructure, real estate projects, and actual market proceedings.
It’s a long process aimed to establish a formidable market basis with the least sensitivity to international and regional economic impacts.