Cavendish Maxwell, a leading property consultancy and chartered surveying firm in the Middle East, released its first Bahrain Property Market Report for 2018-2019, comprising key property data and trends for the country’s real estate market. The industry report was compiled by the firm's in-house strategic consulting and research team, and covers key data and overviews into the residential, retail, office and industrial, and hospitality sectors.
Commenting on the report, Aditi Hariharan, Senior Consultant at Cavendish Maxwell, said: “With 80% of its revenues still attributed to oil, Bahrain perhaps suffered the most from the oil price decline of 2014. However, diversification efforts by the Bahraini government with a focus on infrastructure development, coupled with the aid package from neighbouring GCC countries are expected to further support diversified growth for the economy.
"Residential prices and rents in the Capital, Northern, Southern and Muharraq Governorates of the Kingdom generally declined, with commercial office space mirroring the trend. The retail and tourism sectors continue to be the most stable, boosted by numerous entertainment, leisure and retail events available to visitors and residents.”
Key market insights
Between 2010 and 2018, Bahrain’s GDP grew from BHD 9.7 billion to BHD 14.2 billion with mining, financial services and manufacturing being the top contributors to GDP growth. Bahrain’s position also improved on the World Bank’s Ease of Doing Business ranking in 2019 to 62 from 66 in 2018, reflecting the heightened efforts by the country to attract foreign investment and stimulate entrepreneurship.
A BHD 12.1 billion infrastructure investment pipeline comprised of BHD 3.77 billion in government funding, BHD 2.8 billion from the GCC Development Fund, and BHD 5.65 billion from the private sector has given a boost to the construction sector and supporting industries.
During 2018, rents and sale prices for apartments and villas in all four Governorates displayed a general trend of decline. Meanwhile, demand for affordable properties continued to show an uptick.
Bolstered by tourism, retail continues to be one of the Kingdom’s most stable sectors, recording consistent capacity growth over the past decade. Construction of at least three malls is underway and is scheduled for completion over the next few years.
Lacklustre demand continues for commercial space in Bahrain, with interest mainly observed for small fitted units which require minimum investment from tenants. Whilst steep rental declines ceased in 2018, the market still has not returned to a state of rental growth.
In 2016, Bahrain launched its new tourism identity under the slogan of ‘Ours. Yours. Bahrain’, to further develop the tourism sector as a key contributor to the national economy. Since the launch, tourism numbers have already received a boost, with visitors in 2018 increasing 6% over 2017 at 12.8 million. The Kingdom aims to grow visitor numbers to 15 million over the next four years.