Bahrain's current economic stability, according to foreign real estate consultancy Cluttons, has started to affect its residential property market, stabilizing prices and prompting tenants to look for quality property options. real estate agent
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According to Cluttons' Bahrain Residential Property Market Outlook for Winter 2014, increased emphasis on higher-quality projects would bring rents under pressure at the top end of the market. As a result, it is expected that asking prices for such assets will begin to rise over the next six months as national stability spreads across the Kingdom, resulting in increased economic activity and, as a result, job growth.
"A variety of high-quality projects are already experiencing increased interest," says Harry Goodson-Wickes, head of Cluttons Bahrain. Semi-furnished four-bedroom villas in the Kazerooni Homes development in Saar, for example, rent for around BD 1,800 per month. The perceived high quality finishing and relative affordability of rents attract tenants to these types of top tier schemes."
According to the study, proximity to schools has been an especially strong motivator for current tenants to relocate, with families looking for housing close to Manama's main schools. While this is a global trend, it has resurfaced in the Kingdom as optimism and prosperity return, with households increasingly targeting school districts. Saar has reaped the benefits of this trend, which has been boosted by the disappearance of localized disturbances in the region.
The study also points out that Bahrain's economic diversification would attract a broader range of tenants. It suggests that the residential market's reliance on the daily rotation of US Navy personnel is being supplemented by a slight increase in tenant demand from the education, law and banking, and financial services sectors, with many tenants new to the Kingdom.
"Over the medium to long term," Goodson-Wickes continued, "we expect to see an even broader range of tenant requirements as other sectors of the economy gradually resume growth, generating new jobs and thus households." Bahrain's non-oil sector grew by 2.3 percent in Q1, as the government continues to invest in infrastructure, with funding for projects growing by 2.4 percent compared to Q1 2013, resulting in increased market activity. This has obviously benefited the real estate industry and continues to do so."
According to Cluttons, rents in Manama have remained stable throughout the year, with no changes reported in the first three quarters of 2014. In reality, rents are just 0.8 percent higher than they were this time last year, the lowest annual growth rate since Q4 2011, when rents fell by -0.2 percent.
According to the survey, villas on the Amwaj Islands remained the most expensive in the Kingdom in Q3, commanding average monthly rents of BD 1,275, while apartments in Al Seef remained among the most affordable, with asking rents hovering around BD 700 per month. During the third quarter, one bedroom apartments (BD 550 per month) in Al Juffair, Al Seef, Reef Island, and the Amwaj Islands remained the most affordable form of accommodation.
"There is a clear void in Bahrain's residential landscape for the implementation of a deeper and more widespread affordable housing program to help and deliver the National Housing Plan," Goodson-Wickes concluded.
"For this reason, we expect Eskan Properties' Danat Al Madina development in Isa Town to be especially popular." We still expect a lot of interest from developers in this field in the future."