Bahrain residents moving to 'quieter' areas
Manama, April 24, 2011
Estate agents have reported a mini-migration within Bahrain over the past two months, with people moving to areas deemed 'safer' than others.
The result has been a drop in rents and property prices in certain places, following an increase in tenants moving out and owners looking to sell.
Some landlords said the financial crisis had also played a part in forcing down prices, with one revealing that a combination of global economic turmoil and political unrest in Bahrain had seen rents almost halved in Juffair.
One expert said residential areas located close to villages and known protest areas had been most affected, with residents either leaving the country or requesting moves to developments such as Amwaj Islands and Riffa Views.
'Areas such as Bani Jamra, Jidhafs and around the Pearl (GCC) Roundabout have experienced a significant drop in price and many compounds have been left empty as tenants have become much more security conscious,' said Ruby Properties managing director June Mason.
She revealed she had been swamped with requests to find new homes for tenants, as companies with employees based in areas such as Sanabis now felt it was too risky to stay there.
'From a business point of view I have been inundated with requests to move people,' she revealed.
'Some companies who paid a year up front and are relocating their employees elsewhere are, as a result, losing a lot of money.'
Mason said high-end properties such as large villas had experienced a drop of around 30 per cent, while those at the lower end of the market had suffered a 10 per cent reduction in rental price.
'Some villas in areas such as Saar or Budaiya, which originally were being rented out for BD1,800 a month, have now dropped to BD1,300 or BD1,200,' she added.
'Yet those houses at the lower end, where people have not been forced to leave, have not been affected as much.'
She said some people looking to sell properties were putting them on the market with markdowns of 25 to 30 per cent.
'People have been panic-selling as they just want to leave the country. However the price of land has largely remained the same, apart from the land surrounding particular villages,' said Mason.
However, she added it was now a matter of waiting for the situation to return to normal - something she believes will happen in due course.
'House prices are starting to stabilise compared with last year and the effect of the global financial crisis, which caused property prices to drop dramatically,' she explained. 'But now the market seems more stable and we are seeing an increase in areas such as Amwaj or Riffa Views.'
However, Star International Real Estate country manager Jason Mejia said he hadn't seen house prices change dramatically just yet, adding the market was more likely to see significant changes in six months.
'With rental prices it is still a bit early, but we have seen a shift in price in the Saar and Budaiya areas as people leave for more secure areas like Amwaj and Riffa Views,' he said.
'Places like Sanabis and developments like Abraj Al Lulu (overlooking the GCC Roundabout intersection) have taken a dramatic hit.'
He revealed a two-bedroom apartment in Abraj Al Lulu that used to cost BD900 a month had now dropped to BD600.
Offices in Seef originally priced at BD7 to BD12 per square metre are now going for BD4 to BD5, he added.
Before the start of protests in mid-February, he said a four-bedroom villa in the Saar and Budaiya areas was being rented out for BD1,500 per month.
He reported a drop in rent of 10 to 15 per cent, saying they were now going for BD1,100 to BD1,200.
However, rental prices in Amwaj Islands are said to have seen a slight increase - with villas originally rented for BD850 a month now costing between BD900 and BD950.
'The market has obviously been affected by the political climate, in particular with companies leaving Bahrain,' said Mejia.
'There's also the big question of whether other companies want to be here in the first place for business, particularly when you have Abu Dhabi, Dubai and Kuwait as other options.
'However, we have seen the government trying to do everything it can to make Bahrain bounce back to the way it was before.'
One expert told our sister newspaper Gulf Daily News (GDN) that although areas such as Amwaj Islands and Riffa Views currently had a strong hold on the property market, this was not entirely due to the political situation in Bahrain.
'Indeed places like Riffa Views and Amwaj are attractive to prospective tenants because they offer gated complexes,' he said on condition of anonymity.
'Amwaj also fulfils the fantasy package of living on an island with the beach and scenery that many people want when they come to Bahrain and so prices have risen because of the increase in demand.
'In that respect Amwaj is moving ahead at a cracking pace compared with other areas which are suffering a lot more.
'There is also the matter of the market experiencing a 'reality check' in regard to how much one can realistically charge for a house.
'The financial packages just aren't being offered anymore, so there is a lack of demand for high-end houses valued at BD2,000 or BD3,000 a month, so prices have had to come down.
'Those wanting to move from areas such as Sanabis obviously do not have the same budget to move to Amwaj or Riffa Views, so we are experiencing a mix of prices and tenants' demands.'
A landlord offering two-bedroom apartments in Juffair told the GDN he had been forced to reduce rents by BD100 a month, from BD550 in January to BD450 today.
However another landlord said decreasing prices in Juffair had more to do with a saturation of properties in that area.
'I have a three-bedroom villa for rent with a private pool in Juffair that in January was going for BD1,100 per month, but now because there is a lot of property in Juffair on offer, I have had to reduce it to BD900,' he said.
However, he admitted that he had also been forced to reduce the rent on a five-bedroom property in Busaiteen, Muharraq, from BD1,200 to BD950 a month due to its location.
Another property owner with apartments in Mahooz, Juffair, Riffa and Jid Ali blamed the decrease in housing prices partly on the global financial crisis, as well as the current political climate in Bahrain. 'Last year, a two-bedroom apartment in Juffair was going for around BD900 a month,' he said.
'Now, owing to the economic crisis and later the situation here in Bahrain, the same apartment is being rented out for BD500.
'With property in central Manama and close to villages, prices had no other choice but to come down, whereas in other areas which are deemed as 'safe' - such as Amwaj - they can keep their prices the same.'-TradeArabia News Service