Real Estate Bahrain homebuyers opt for more affordable real estate By Gavin Gibbon June 27, 2023, 11:55 AM Reuters/Hamad I Mohammed Builders at a government housing project in Budaiya, west of Manama. Increased cost of credit and high residential prices have led to a surge in demand for affordable housing Demand for cost-effective homes Luxury villa values flat but prices up for mid-market homes Total transaction values climbed 3.9% in 2022 Bahrain residents are turning towards more affordable real estate in the kingdom, says property consultant Knight Frank. The average price for apartments declined by 3.5 percent year on year to BHD668 ($1,772) per sq m, according to Knight Frank’s Bahrain Real Estate Market Review Summer 2023 report. Villas recorded a marginal increase of 1.5 percent over the last 12 months to BHD640 per sq m. Faisal Durrani, Knight Frank partner and head of Middle East research, said the latest data suggests “an affordability ceiling may have been reached”. Rising cost of credit squeezes Bahrain luxury property Bahrain is likely to miss target on balancing books Affordable homes warning for Dubai private developers Favourable economic legislation, such as the foreign ownership law introduced in 2016, the creation of 10 freehold zones, and the introduction of the Golden Residency Visa in 2022, which grants long-term residency, are all expected to stimulate activity in the real estate market. “We have noted a surge in demand for affordable housing units in Bahrain, as many families are looking for both comfortable and cost-effective homes owing to the current global economic landscape, increased cost of credit and high residential prices,” Durrani said. The report added that affordable real estate offered through the Mazaya Social Housing Finance Program are the most popular options among Bahrain nationals. The volume of residential transactions increased by 13 percent during the first quarter of the year, compared with the same period last year. Bahrain’s real estate market recorded a 0.7 percent year-on-year increase in the total volume of transactions (21,600 deals) by the end of 2022. Total transaction values have climbed by 3.9 percent to BHD1.08 billion. High-end apartment prices in Bahrain dropped by 1.3 percent quarter on quarter in the first three months of 2023, according to a report published by Savills. Luxury villa values stayed flat over the quarter, in contrast with price increases of more than 5 percent across the mid-market segment. The kingdom’s GDP grew by 4.9 percent in 2022, the highest recorded in more than five years, while foreign direct investments grew by 5.8 percent year on year to reach BHD13.3 billion. “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,” Swapnil Pillai, associate director research at Savills Middle East, said.
