Bahrain Real Estate News
Bahrain realty sector to face major challenges in short-term
Property sales in Bahrain have literally dried up and during the next two years, the sector will be posed with significant challenges, reveals a new report by CB Richard Ellis.
The lack of transactions in the sector and high number of inappropriately positioned products in the pipeline will be major issues for the real estate sector in Bahrain.
The number of sales in 2009 has borne the impact of “prohibitive” cost of mortgages, the report said. The rampant land speculation which worked in 2007 and 2008 resulted in large areas of Bahrain being locked from development, atleast during the short term, the report said.
According to the study, the rental rates for residential properties were held up reasonable well across the board, as had commercial office rates in popular areas.
The residential lease rates for quality apartments in prime localities such as Seef District and Juffair have dropped by nearly 10 percent during Q4 2008, in comparison to the 50 percent drop in few parts of Dubai.
Despite the formal cancellation of few residential projects, many have been put on hold or delayed, until new construction contracts have been negotiated, the report added.
During the short term, office rental rates for Class A space continues to weaken in the more troubled areas, as tenants in these areas prefer locating to emerging areas such as Seef District, continued to be supported by significant volume of new stock, CB Richard Ellis Report said.
The report also explained that the Bahrain economy remained in good shape last year, despite a small decline compared to its Gulf neighbours, and is expected to bounce back fairly strongly in 2010 with the support of government infrastructure expenditure across a broad range of sectors.
Posted on 11/2/2010
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