Bahrain: No change in real estate rents in Q3 2016
Households in Bahrain have been faced with some very challenging headwinds over the past 12-18 months, with subsidy removals and job security fears
Despite slowing economic conditions, which continue to hamper the property market in Bahrain, there has been a marked stabilisation across most real estate sectors in the second half of 2016 that is expected to carry into 2017, according to international real estate consultancy, Cluttons.
It's Bahrain 2016/2017 Winter Property Market Outlook report highlights the resilience of rental budgets in the residential market which, in the face of economic fallout and rising inflation, continue to outperform expectations.
In the office market, the stability borders on stagnation with no change in rents during the first nine months of 2016. The same can be said for a remarkably sluggish retail real estate market, with rents in this sector expected to hold steady for another six to twelve months, stated the report.
Harry Goodson-Wickes, head of Cluttons Bahrain, said, “The stabilisation in rents across the sector is reflective of weaker underlying fundamentals in the market. Economic fragility and the ongoing impact of the low oil price environment have curtailed job creation levels and dampened overall sentiment and this will continue to hamper the Kingdom’s property market during the fourth quarter, continuing into H1 2017.
"The few exceptions where we have seen growth include developments such as Amwaj Islands for the residential market, the Financial Harbour for the office market and Isa Town for the retail market.”
The research shows that with the exception of Amwaj Islands, where there was a marginal $132 (BHD50) per month rise in rents for four-bedroom villas, no other submarket in the Kingdom registered any change in rents during Q3.
Goodson-Wickes, explains, “Our experience shows that quality and perceived value for money continue to drive interest in newly launched schemes, suggesting that tenants are very much in the driving seat and can cherry pick from a range of options on the market.
"At Segaya Views and Cebarco Tower, for instance, we have recorded a steady level of enquiries for the 140 furnished one-, two-, and three-bedroom apartments on offer, with rents starting from as little as $1,719 (BHD650) per month.
Faisal Durrani, Cluttons’ head of research, added: “Households in Bahrain have been faced with some very challenging headwinds over the past 12-18 months, with subsidy removals and job security fears denting confidence and driving down budgets, but we appear to be entering a period of stability with the market flattening out.
"We had previously expected to see rents decline by 5% on average through the course of the year, but we have now revised up our forecasts for the residential rental market, with little to no declines now anticipated as we head toward the end of 2016.”