Bahrain Q3 property and employment suffer oil dip
A Cluttons report found residential prices have dipped in areas such as Al Seef, with oil price fluctuations impacting buyer behaviour in Bahrain
Bahrain's retail market is on the rise, particularly in the north east of Manama, a Cluttons study has found.
Cluttons released the Bahrain, Winter 2015/2016 Property Market Outlook report on 3 November, 2015.
"After growing for three consecutive quarters, average residential rents in Bahrain's prime residential areas dipped by a marginal 0.1% during Q3 2015," the report stated.
"While apartments were solely responsible for the slight decline in average residential rents, the fall was confined to Al Seef.
"Despite this, year-on-year rents in Al Seef are 2.4% up on Q3 2014," the report continued.
In a post on LinkedIn, Cluttons' head of research, Faisal Durrani, said: "The ability of Manama's office market to sustain the slight turn around in rents seen so far this year very much depends on how the global economic story plays out.
"With challenges ahead for China and the EU, and with commodity prices unlikely to stage a comeback in the near term, the global economy is now expected to grow by a downwardly revised 3.1%, the slowest pace since 2009, according to the latest IMF forecasts.
"The retail market's penetration continues to rise, with developers keen to introduce retail schemes designed to offer everyday conveniences such as gyms, supermarkets, cafés, and pharmacies.
"The market also continues to witness strong growth in the appetite for space with activity particularly buoyant to the north east of Manama."
Durrani continued: "Despite the relative stability in the lettings market, the long sustained period of low oil prices is likely to start impacting overall business activity in the short term.
"...As with other oil-based economies, underlying market confidence in Bahrain is expected to weaken as organisations, particularly those in the hydrocarbon sector, consolidate activity, and reduce head count.
"What this means for the Kingdom’s property demand is a slowing in the rate of job creation, and therefore, a reduction in the rate of household creation – a phase we have already entered," Durrani continued.