'Bahrain’s property market unaffected by fluctuations in oil price'

Manama : Bahrain fared better than its neighbours during the global oil-price crisis, helped mainly by the inherent strength of its economy, said a top financial expert yesterday. 

According to Bahrain’s Economic Development Board’s Director of Real Estate, Tourism and Leisure, Ali Ghulam Murtaza the Kingdom’s property market played a crucial role in this fight-back. 

Citing the high 3.6 per cent growth registered in the Real estate, Hospitality and Construction (RHC) sector, Murtaza pointed out that the Kingdom’s property market remains greatly unaffected by the oil-price fluctuations that engulfed the world. 

Global oil prices fell sharply over the last seven months of 2015 and continue to plummet, leading to significant revenue shortfalls in many energy-exporting nations. Since the fall, most countries in the Gulf Cooperation Council have attempted to diversify their markets and expand beyond oil and gas industries. 

“One of the key non-oil sectors that have been earmarked to help diversify revenue streams and economic base is RHC, as a result of which it has remained relatively stable,” said Murtaza.  

He, however, agreed that the initial stages of the fluctuations were difficult for the regional economies in terms of investments and expansions, as the main focus were on their oil-boons. 

“So, naturally, economies slowed down as people tried to re-adjust their lifestyles,” he said adding that Bahrain, however, was quick to adapt. 

“We diversified our market even more and have registered a high growth of 3.6pc in RHC,” he said. 

Supporting his claims, Murtaza said that the island’s economy runs on less that 20 per cent of the oil and gas industry, while the rest of the industry players are privatised.

Expressing his confidence in the growth potential of the realty sector, he said, “Our current property laws also incorporate a strong focus on visions and strategies that systematically enhance tourism, and Foreign Direct Investment (FDI).” 

“The value of such visions has not been factored into the real-estate price, although, it will start showing up in a couple of years. So now is the best time to invest in Bahrain’s property market,” he added. 

As per EY’s ‘Decreasing Oil Prices and GCC RHC Market’ report, EDB has taken significant measures to create a suitable environment for RHC growths through development plans, laws and regulations. The EDB has invested over US$200 on industrial and infrastructure projects in the past two years and better lease laws have been endorsed to regulate lease agreements between the lessor and lessee.