In this exclusive video interview, Edd Brookes uncovers the dynamic landscape of Bahrain's real estate sector. As Edd shares his expert insights and analysis, you'll gain a deeper understanding of the market's current state, emerging trends, and the opportunities it presents to investors and developers. Stay tuned as we continue to unravel more insights from our exclusive interviews and explore digital trends, sustainable developments, challenges, and opportunities that shape Bahrain's real estate landscape.
To provide you with a concise summary of our video interview with Edd Brookes, let's explore the key takeaways from our discussion:
CURRENT STATE OF THE REAL ESTATE MARKET
In the first half of 2023, Bahrain's real estate market experienced subtle growth, with sales remaining robust. The total value of real estate transactions soared by 14.5%, reaching an impressive BHD 1.2 billion (approximately US$3.2 billion) through over 11,500 transactions.
In the mid to high-end apartment segment, rents saw a 2.5% increase, while sales prices declined by 1.1%. In contrast, the villa market experienced a 1% drop in quoting rents but a nearly 1% increase in sales prices. Capital Governorate continues to boast the highest quoting rents, with Muharraq closely following suit due to the introduction of high-quality assets in Diyar al Muharraq and Dilmunia.
The office market showed marginal improvement, with vacancy rates dropping slightly to 26%. Key drivers include government and quasi-government entities seeking larger floor spaces and international firms requiring spaces under 250 sqm. However, a significant influx of new office space, primarily in Bahrain Bay and Bahrain Financial Harbour, is expected to affect rental rates in the medium term.
Approximately 70% of malls in Bahrain reported an increase in occupancy levels, resulting in an average occupancy rate of 72%. Dragon City, The Avenues, and City Centre recorded the highest occupancy levels. However, average rents within organized malls softened to 14 BHD/sqm, down from 15 in 2022. Notably, e-commerce spending experienced remarkable growth, surging by 9.7% and accounting for nearly 35% of total retail spending in Q1 2023.
Year-on-year data indicates a 5% increase in average occupancy rates, reaching 52% in 2023. Bahrain Airport welcomed approximately 4.1 million passengers during the first half of 2023, marking a significant 43% increase from the same period in 2022.
TRENDS AND RECENT DEVELOPMENTS
The Bahraini real estate landscape has witnessed several notable trends and developments:
- The introduction of a Golden Visa program, available to both residents and non-residents, with specific property and income requirements.
- An ongoing Memorandum of Understanding (MOU) signed with Saudi Arabia to promote both countries as a regional tourist destination.
- The re-establishment of direct flights between Qatar and Bahrain, offering potential benefits to Bahrain's retail and hospitality markets.
Evolution and Influencing Factors
The evolution of Bahrain's real estate market in recent years can be attributed to regulatory improvements. The Real Estate Regulatory Authority (RERA) has implemented internationally recognized standards, including those from the International Valuation Standards (IVS) and the Royal Institution of Chartered Surveyors (RICS). This regulatory framework, including mandatory training sessions, has created a more robust property market, appealing to international investors.
Property Types and Demand
While villa and apartment sales experienced a minor decrease of 0.2%, rents for these property types increased by 4.6% and 7.3%, respectively, in the year leading up to June 2023.
Demographics and Economic Influences
Bahrain's population has been steadily growing, with a 13,000 increase from 2022 to YTD 2023, reaching approximately 1.48 million. Over a quarter of this population is under 19 years old, contributing to a demand for 1 and 2 bedroom apartments as young individuals seek more independence.
CHALLENGES AND OPPORTUNITIES
Investors and developers in Bahrain's real estate sector face several challenges and opportunities. Challenges include fluctuating interest rates, such as the BHIBOR rate of 5.38% and a cash rate of 6.5%. Additionally, the high cost and limited availability of land in Bahrain have led developers to focus on the luxury end of the market, potentially leaving a gap in affordable housing.
In conclusion, Bahrain's real estate market presents a mix of opportunities and challenges, with robust growth, regulatory improvements, and demographic shifts shaping its current landscape. As the nation continues to evolve, investors and developers must carefully navigate these factors to succeed in this dynamic market.
CITYSCAPE BAHRAIN: A NETWORKING GOLDMINE
In the vibrant world of real estate, opportunities often arise from personal connections, shared visions, and mutual understanding. Cityscape Bahrain (14 - 16 Nov 2023 - Exhibition World Bahrain) stands tall as the embodiment of such opportunities, offering a networking platform that's unparalleled in the Middle East. Dubbed by many as the 'Networking Goldmine,' this event has proven year after year that relationships built here can lead to transformative business deals, groundbreaking partnerships, and dream property acquisitions.
Why Cityscape Bahrain is the Ultimate Networking Destination
Cityscape Bahrain isn't just another real estate expo. It's a confluence of industry leaders, innovative developers, eager investors, and potential homeowners, all gathered under one roof with a shared passion for real estate. The event's layout encourages interaction, with dedicated networking zones, interactive booths, and spaces designed for one-on-one discussions.
Moreover, the event schedule is meticulously crafted to foster networking. From panel discussions where attendees can interact with speakers to cocktail receptions designed for casual mingling, every moment at Cityscape Bahrain is an opportunity to connect.