Bahrainis go on a property buying spree

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Investors in Bahrain are on a property-buying spree to secure their wealth in more profitable sectors with little risks, amid the coronavirus (COVID-19) pandemic, a top Bahrain realty expert said. The purchasing spree has caused the realty sector to regain its momentum, which got lost in the downturn caused by the deadly outbreak. Latest data showed that real estate registrations were surging and have already reached 1,920 this month, which is also the highest recorded so far in 2020.

This newfound energy in the sector, according to the Bahrain Real Estate Association chairman Nasser Ali Al Ahli, is mainly due to people returning to the market looking for “more profitable sectors with little risks” to secure their funds. “The real estate operations didn’t stop, but they retreated slightly due to the fears and panic caused by this pandemic, lack of clarity of vision, and the total stoppage of the business environment in Bahrain and the world,” an AlAyam report quoted Al Ahly as saying. “Things are very different now. People have started practicing life normally. Whoever had plans to buy a house, land or building and postponed it because of the coronavirus, is now back, which contributed to the rise in real estate registration.”

Fixed deposit losing charm

One of the reasons for the current surge, according to Al Ahly, is that investors and citizens who had small amounts deposited in banks in the form of fixed deposits are directing those funds to more profitable sectors with little risks. “This is especially because of the low rates of returns on fixed deposits in banks that do not exceed one per cent,” he added. People, he said, are now withdrawing their deposits and investing in real estate by buying small buildings or houses, and even buying land as future investments that would yield higher returns than bank deposits.

The current uptick in registration also follows a dip during the March, April and May, where the total number of registrations was 732. Realty started kicking back in June where the registrations reached 1,133. July followed with 1,349 transactions. Activities continued to get stronger in August by recording 1,642 transactions. The activities slowed down a bit again in September, where total transactions were 1,447, before returning to a record high in October. In terms of volume, the value of real estate transactions in October touched BD71.588 million, bringing the total volume of real estate trading until end of October this year to BD554.455 million. The volume of real estate trading until the end of the third quarter was BD482.867 million.