Lack of transparency blurs outlook for Bahrain property market
Thursday, 25 June 2009
Off plan property sales in Bahrain have virtually dried up but it is difficult to judge the impact of the global downturn on the real estate sector because of lack of transparency, it is claimed.
Separating fact from fiction is very difficult as the property market is far less transparent than in the rest of the Gulf region and transaction activity is not fully recorded or reported, according to a market overview from consultants CB Richard Ellis.
The fact that the Bahrain government has announced plans to build 43,000 homes by 2014 might indicate that the impact has been less severe but it is hard to draw conclusions, the report says.
Analysts believe that Bahrain has not experienced the same level of investor/speculator activity that has harmed the Dubai property market, for example, but sales appear to be sporadic.
Expatriates in Bahrain are typically more focused on saving than spending and are less likely to buy property. Also the variety and pricing of mortgage products in Bahrain is both small and expensive and this is a disincentive to potential buyers, says the report.
The greatest pressure for housing is in the low-income and social housing sectors, with private sector developers claiming that the Kingdom needs 80,000 social housing units by 2020.
The report also points out that the number of professional expatriates who have lost their jobs in Bahrain has not been fully quantified but has been sufficient to take much of the pressure off rental accommodation supply.
Similar to Dubai, it was this growing pressure on available rental accommodation and its pricing that was starting to drive premium property prices. Rental accommodation pressure has now eased, such accommodation is vacant and rental rates have stabilised.
Source