Bahrain residential real estate sales values have continued to grow in the first quarter of 2023 but at a slower pace than in 2022, as mid-end villa developments in the country increased in value by 5.2% year-on-year (YoY).
Sales prices reached 603 Bahraini dirhams (USD 1,603.72) per sq.m. compared to BHD 573 per sq.m. in Q1 2022.
However, rising credit costs have impacted demand for high-end or premium developments, with high-end apartment values dropping by 1.3% quarter-on-quarter, according to a market update by Savills.
In the rental market, demand for these low-end and mid-end villas remained strong as end-users limited their expenses owing to the current global economic landscape, Savills said.
Prices are now 18.5% higher than Q1 2022 and are estimated at BHD 800 per month, the property advisor’s report stated.
In the office space, rental values in the mid-end segment have increased by 15% on a Year-on-Year (YoY) basis.
However, high-end rental values remained stable across 90% of the Grade A stock tracked by Savills, but on average, rents dropped by 1.5% on a quarterly comparison and 2.1% on an annual comparison.
The sales market reflected the sentiment of the rental market with mid-end capital values experiencing YoY growth of 4.6%, largely attributed to reduced available stock in the sub-sector, the real estate company added.
The Survey and Land Registration Bureau data show that the value of real estate transactions increased by 17% YoY in Q1 2023 to BHD 243.1 million, Savills said.
Hashim Kadhem, Head of Professional Services in Bahrain, while interacting with the media outlet ‘Mechanical, Electrical & Plumbing’, said the government policy changes such as the introduction of the ‘Golden Licence Scheme’ for foreign and local businesses have been a step in the right direction.
“Incentives to investors such as priority in the allocation of land for investments, streamlined access to business licensing and building permit approvals, among others, will help further stimulate the economy and thereby benefit the commercial real estate sector this year,” Kadhem added further.
On the kingdom’s economic indicators, Swapnil Pillai, Associate Director Research, Middle East said, “Bahrain’s economic data shows promising signs of continued resurgence which will bode well for sectors including real estate as we progress into the year. GDP grew by 4.9% in 2022, the highest recorded in over five years, whilst Foreign Direct Investments (FDI) grew by 5.8% y-o-y to reach BD13.3 billion in 2022.”
“The positive economic momentum was also reflected across the real estate sector with the Survey and Land Registration Bureau data showing that the value of real estate transactions increased by 17% y-o-y in Q1 2023 to BD243.1 million,” he concluded.