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Bahrain Residential Rents Stabilise In Q4 2012

Bahrain Residential Rents Stabilise In Q4 2012

The residential leasing market in the country is slowly picking up despite political instability, says report.

The residential leasing market in Bahrain continues to “show some life” despite the slowdown in most employment sectors, according to a new report by property consultancy CBRE.

Rents in the apartment sector have finally stabilised in most areas, but many of the compound locations continue to see a slight dip in both occupancy and rental rates, said the report.

“This combination of factors appear to indicate that the troubled political environment in Bahrain is making the Kingdom less appealing for expatriates with families with the shortfall being taken up by expatriates on bachelor status,” it said.

Lack of available or suitable accommodation in Saudi Arabia’s Eastern Province is also creating opportunities for compounds in and around Bahrain’s Hamala area, from which expatriates can commute daily via the causeway.

In terms of apartments, the most popular locations for tenant enquiries are Reef Island and Juffair, while rents remain high in the Amwaj islands area, the report said.

Residential sales in the country are also continuing to slowly pick up in specific pockets, with villas sales up five per cent in the fourth quarter of 2012.

However, in terms of the apartment sales sector, a number of high profile, high cost projects failed and remain unresolved with investors suffering as a result, said CBRE.

“Investors or end users will be extremely cautious when buying off-plan in this environment, and will return to their caution of a decade ago, when buyers only bought what they could actually see,” it said.

The ‘affordable’ market segment is also largely “off the development radar,” with developers either engaged in middle or high-income building projects or seeking to assist the government in its programme of social housing projects.

“Site assembly and infrastructure are often complex, land prices remain completely out of line with commercial realities, government regulations often do not allow creative solutions from the private sector and mortgage finance remains expensive,” the report added.

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