Bahrain’s economic growth on an upward trajectory

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Bahrain’s economic growth will chart an upward trajectory this year, confronting global headwinds, helped by increased investments, a new report predicts. “Overall, 2021 will be a year where economies will return to growth, especially as Bahrain resumes normal operations once again,” said Property Finder, a leading online real estate platform in the Middle East and North Africa.

“With a calmer political situation in the region, and a clearer idea of the pandemic and the direction it is taking, investment in Bahrain is expected to grow, on both the residential and commercial segments,” the report citing the latest trends in the sector explains.

Property Finder, in the report, also expects the economy to return to growth as the businesses return to normality.

The report describes 2020 as a year of struggle with prices remaining unstable in all markets and sectors globally. Economies worldwide have been affected, with the real estate industry witnessing the same, the report adds.

The report, however, observes that the Kingdom managed to tide over the repercussions, helped mostly by an $11.4 billion stimulus package.

“The stimulus helped Kingdom softened the blow to a certain extent, also supported by a rise in fin-tech,” said the report. “This is supposed to help the Kingdom stabilise in the coming years,” the report added. Property Finder also reported a decline in rental unit prices in all governorates, excluding Capital, citing advertised prices.

Capital governorate witnessed a price increase of 16% in the average price for rental units when comparing 2019 with 2020. The report attributes the increase to a 40% rise in the availability in the Capital Governorates. “Newly available stock may have driven up the average price in the area.”

Pandemic affected sales in the four governorates of the Kingdom in 2020 when compared to the prior year. “Recorded the highest decrease of 16% in Muharraq,” the report adds.

The report also points out that Bahrain is on its way to becoming a mature, more transparent buyers’ market, “as opposed to a market that is focused heavily on rentals,” citing increased interest in the sales sector. The report also highlights that the pandemic made way for many first time buyers in the Kingdom as prices become more affordable and within reach. “With the causeway closed off, and external investment, not an option, purchasers within Bahrain were able to take advantage of this downward price trajectory, with some securing their first real estate investment in the kingdom,” the report adds.

Apartment, villa rentals

According to Property Finder, in Dilmunia Island, the advertised monthly prices dropped from BD 500 to BD 450 as high-end projects in the development needed a shift in price strategy to keep demand alive. Juffair reported a drop from BD 550 to BD 500, as owners and landlords tried to lure in new tenants locally.

Interestingly, in Riffa Al Sharqi, the advertised prices rose from BD 260 to BD 280 between 2019 and 2020. The villa rental sector also recorded a downward price trajectory when compared to 2019. Budaiya recorded a price decrease from BD 900 to BD 650 in 2020 from a year ago.

The same was the case with Jannusan, where advertised prices dropped from BD 1,300 to BD 900.

Property, villa sales

Property finder, citing reports, also says that approximately 7,500 freehold apartments will hand over in Bahrain in the next five years.

“Interest in freehold apartments is increasing, and as RERA continues to play a role in regulating prices and sales processes,” the report adds.

The report also highlights that buyers were eager to take advantage of decreased prices in the market, with first-time buyers jumping on the wagon last year. Prices in locations like Durrat Marina and Reef Island dropped from BD 783 to BD 709 per SQFT and BD 1,010 to 901 per SQFT, respectively, between 2019 and 2020.

Even though the market for freehold-villas gained some traction in Bahrain, buyers are now looking for the most affordable offers, the report adds.

Sales in Riffa decreased from BD 657 per SQFT to BD 544 per SQFT between 2019 and 2020.

In Sadad, prices dropped from BHD494 per SQFT to BHD451 per SQFT between 2019 and 2020