Bahrain's residential property market is showing signs of stabilisation, helped by the fact that some projects have stalled or slowed, according to the property consultancy Cluttons.
Bahrain property prices and home rents flat as expats make a return
Bahrain's residential rents and property prices are showing signs of stabilising, helped by the fact that some projects have stalled or slowed, says the property consultancy Cluttons.
"There has been an upturn in the number of new expats coming to Bahrain, specifically in the oil and gas industry, and it is understood that the international schools have waiting lists again, not seen since the beginning of last year," Cluttons said in its first-quarter report on Bahrain's residential market.
"Having said this, demand is not as strong as it was pre-2011, and rents are only being kept flat due to the lack of new properties coming to the market, with many of the larger projects being delayed or put on hold," Cluttons said.
Rents for some apartments, even in popular areas, have fallen by 6.25 per cent compared with 2010, it added.
"Companies are taking advantage of the situation and are taking on multiple villas within compounds, further driving down prices," it said.
"There is some price stability in popular areas such as Amwaj, Jasra, Hamala, Saar and Janabiya, and well-maintained compounds with good facilities and security are proving to be more popular than individual villas."
Cluttons expects most districts to experience flat to low rent growth.
Meanwhile, sales activity is also limited.
"The sales market is quiet, with the majority of sellers refusing to realise a loss, thus keeping their properties on the market for longer periods," Cluttons said.
Real GDP growth in Bahrain is estimated to have declined to 1.5 per cent last year as political unrest in the country impaired economic activity, according to data from the IMF. This compared with growth of 4.1 per cent in 2010.
"However, the economy is expected to recover strongly by 3.6 per cent in real terms in 2012 as oil prices are expected to remain high and other sectors such as tourism and financial sector recover after a turbulent 2011," Global Investment House said in a recent report. "Bahrain was hit hard during 2009, recording negative year-on-year growth rates in all sectors.
"The financial crisis [ended] the rapid economic growth that the GCC region had been witnessing, with Bahrain being no exception. … The real estate sector also declined due to lack of liquidity and credit from banks and a fall in investor confidence," the report said.