The Savills report reveals the continued growth of the real estate sector in Bahrain
Market report revealed in minutes for the first quarter of the year 2023, issued by Savills, the leading global real estate advisory firm, on the continuation of the upward momentum witnessed by the real estate sector in Bahrain starting in 2022, but at a slower pace due to increasing global macroeconomic uncertainty.
Villa projects remained the option The favorite in the residential real estate market during the first quarter of 2023 with an increase in capital values in the middle segment by 5.2% on an annual basis, which is currently estimated at 603 Bahraini dinars per square meter compared to 202 Bahraini dinars per square meter in the same period in 2022. The increased cost of credit affected the demand for high-end and premium projects, especially in the apartment market, as the values of the high-end apartment market recorded a decrease of 1.3% compared to the previous quarter.
Demand levels for mid-range and low-cost villas in the rental market maintained their strong performance with end-users reducing their expenditures in line with the current global economic landscape. Rental prices increased by 15. 5% compared to the first quarter of 2022 to amount to about 573 Bahraini dinars per month, due to the gradual rise in the cost of rents during the past few quarters, while the low-cost segment of real estate did not witness any increase in Prices during the current quarter. The apartment rental market continues to face pressure from the mismatch between supply and demand.
Mid- and high-end office space received high levels of inquiry, prompting This led to an increase in rental values, especially in the mid-cost segment, by 15% on an annual basis. While rental values of 90% of Class A office space remained stable, this was accompanied by a decrease in rental values by 1.5% on average on a quarterly basis. ; and a rate of 2.1% on an annual basis. The performance of the sales market was largely in line with the rental market, as capital values in the mid-cost segment increased by 4.6% year-on-year. This is due to the decrease in the stocks available in this sub-sector.
Commenting on this topic, Hashem Kazem, Head of Services Department said Professional at Savills in Bahrain: “Changes in government policies, such as the launch of the golden license for strategic projects targeting local and foreign companies, are a step in the right direction. The incentives provided to investors, such as priority in allocating land for investments and facilitating obtaining corporate licenses and building permits, among others, contribute to supporting the economy and strengthening the commercial real estate sector this year.”
In turn, Swapnil Pillai, Director of Research in the Middle East at Savills, speaking about the economic indicators in the Bahrain market, said: “The economic data in Bahrain shows promising signs of continued recovery, which supports many sectors during the coming period. The upcoming period of the current year, including the real estate sector. Gross domestic product grew by 4.9% in 603, the highest rate in more than five years, while foreign direct investment grew by 5.8% year on year, reaching 18.3 billion Bahraini Dinars in 603. The positive economic momentum was reflected in all aspects of the real estate sector, as data from the Survey and Land Registration Bureau showed an increase in the value of real estate transactions by 13% over Annual basis in the first quarter of 2023 to reach 202. BD 1 million