Cluttons, the real estate specialist which has enjoyed a dedicated Middle Eastern presence since 1976, has announced its Q3 market report for Bahrain’s residential market 2012. The residential market in Bahrain is seeing mixed performance with many areas experiencing a decline in rental values over the last six months as the perception of a ‘renters market’ is driving many tenants to bargain hard for lower rental rates. The sales market has seen an increase in properties for sale across the Island as an increasing number of expatriate owners look to recoup some of their initial capital and GCC buyers take a longer term view of the market.
Current tenant demand is focusing on modern developments providing additional facilities and amenities, with attention to quality fittings. This can be seen in Juffair where new developments such as Fontana Towers are sparking a renewed interest in the area, with enquiries for residential accommodation showing a marked increase over the past three months. The strengthening villa rental prices in areas such as Adilya and the Amwaj Islands is a sign that the market is nearing the bottom of the rental cycle.
The rental market has also seen the emergence of a new micro-market with the continued influx of expatriates from Saudi Arabia as many companies relocate to the Eastern Province, while their employees are choosing to live in Bahrain. Several self-contained developments have, or are being, developed to meet this new demand with asking rates higher than elsewhere, ranging from BD 1400 to BD 2000 per month which is significantly above the market norm.
The residential sales market has seen a significant rise in properties for sale as homeowners have failed to receive their anticipated return on investment in the past few years. This has created an oversupply that is driving sale cost down across the Island. Demand and activity in the residential sales market remain extremely low from expatriates and investors due largely to concerns about the impacts of the ongoing socio-political situation, but this may change over the coming months as reduced asking prices are known to attract purchasers into the market.
The development of residential projects aimed at the Bahraini middle-income sector remains busy. An example of this is Manara Developments, which recently announced the launch of Phase 2 of its Wahat Al Muharraq residential development. The first phase provided 47 villas while the second phase will provide an additional 180 villas priced from BD 98,600.
Cluttons predicts continued ongoing activity and interest in the residential market in Bahrain over the next six months. However, with increased supply hitting the market in the form of large residential developments, it is likely that rental values will continue to soften for the foreseeable future.
