In a signal of confidence, real estate in Bahrain is expected to receive an influx of Saudi investments.
With the reopening of the King Fahd Bridge that connects the two countries driving up tourism prospects, and an increase in demand and transactions for residential and retail real estate in Bahrain, experts suggest that non-Bahraini investors, particularly those from Saudi Arabia, will be looking closely at the country’s real estate potential.
Here’s a look at the sector’s performance in recent months, and what the outlook is moving forward.
PICKING UP POST-PANDEMIC
2020 looked shaky for real estate in Bahrain at the start, with several construction projects being rescheduled due to the global pandemic. The sector eventually picked up. Real estate deals in Bahrain rose by an average 17% in the second half of 2020, and real estate transactions reached a total value of USD 1.9 billion in the year. Overall, however, the outlook for real estate in Bahrain remained subdued owing to macroeconomic factors and oversupply in the residential space.
Notable highlights for real estate in Bahrain include a delivery of 30,000 homes across the past five years up to 2020, 769 tenders worth USD 1.75 billion awarded in H1 2020, 45,000 completed online transactions last year (amidst a bid to digitise real estate services in Bahrain), and ownership and regulatory reforms to amp up the sector’s investment appeal.
In 2021, real estate in Bahrain went on to record a surge of 36% in property transactions in Q1. About 3000 properties were sold for a total value of USD 600 million. Compared to transactions in last year’s Q1, this represented a growth of 51%.
WHAT'S IN THE PIPELINE FOR REAL ESTATE IN BAHRAIN
A key forward-looking development for the sector is Bahrain’s National Real Estate plan for 2021-2024. The plan follows up on the Bahraini government’s vision of increasing the economic contribution of real estate through diversification. In addition to five initiatives and 17 projects, the plan also includes regulatory boosters, long-term plans and operational initiatives, the Economic Development Board of Bahrain has said.
The interest in Saudi investments doubles down on several other initiatives expected to bolster real estate in Bahrain. The sector is bracing for a potential resurgence amidst plans to heavily promote tourism post-pandemic. All in all, real estate in Bahrain currently faces a climate of cautious optimism.
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