Dubai- Masaader News
Various government initiatives introduced throughout the course of 2021 have helped drive an increase in property transaction values in Bahrain and generated optimism in local market sentiment across the residential sector, according to the Savills Q4 2021 update on the Bahrain market.
The value of real estate transactions in Bahrain reached BHD 1 billion in 2021, growing by an impressive 46% y-o-y, according to data from the Survey and Land Registration Bureau (SLRB) and the Real Estate Regulatory Authority (RERA). To maintain this strong growth momentum, the government revealed a four-year National Real Estate Plan 2021-2024 in March 2021 to promote investments into the sector, develop innovative real estate enterprises, and preserve all the stakeholders’ rights, thereby creating a secure and transparent real estate sector. In October 2021, the Government of Bahrain announced a new national economic growth and fiscal balance plan. The multi-year, five-pillar plan is one of the largest economic reform programmes for the Kingdom and aims to improve Bahrain’s long-term competitiveness.
Swapnil Pillai, Associate Director Research, Middle East, said: “Offshoots of a gradual recovery in the market were already visible as the Q4 2021 Savills residential capital value index remained stable. This is the second consecutive quarter where prices across the residential sector remained unchanged across apartments and villas. However, on an annual comparison, prices remain on average, 1.6% and 4.2% lower across apartments and villas, respectively, compared to Q4 2020, creating room for increased investments.”
The residential rental index for Q4 2021 remined relatively stable on a quarterly basis; however, similar to capital values, on an annual comparison, rental values across apartments were 5% more affordable. The decline in prices was more prominent across the mid-end (3.5% y-o-y) and high-end (1.4% y-o-y) segment, whilst they remained stable across the low-end segment.
Hashim Kadhem, Head of Professional Services, Bahrain, said: “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.”
In the commercial segment, the uncertainty in the office sector in Bahrain was reflected by an average y-o-y drop in office sales prices of nearly 2.9%. In the rental market, mid-end offices experienced an average y-o-y decrease of 13.3% due to the dual effects of tenants who either sought cheaper, low-end alternatives, or relocated to higher-end office developments that offered competitive rates.
Kadhem added: “Going forward, a deeper analysis of office space that’s required will occur. International tenants are likely to adopt hybrid working practices, leading to downsizing of existing spaces and take-up of smaller spaces. Also, there will be an increased focus on the repurposing of older stock that does not meet the Environmental Social and Governance (ESG) requirements of tenants.”
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About Savills:
Savills plc is a global real estate services provider listed on the London Stock Exchange. With a presence in the Middle East for over 40 years, Savills offers an extensive range of specialist advisory, management and transactional services across the United Arab Emirates, Oman, Bahrain, Egypt and Saudi Arabia. Expertise includes property management, residential and commercial agency services, property and business assets valuation, and investment and development advisory. Originally founded in the UK in 1855, Savills has an international network of over 600 offices and associates employing over 39,000 people across the Americas, UK, Europe, Asia Pacific, Africa and the Middle East.
For further information about Savills: www.savills.com
Media Contact: TOH PR / savills@tohpr.com / +971 (0)43828900