Bahrain's residential real estate sector continued its recovery momentum in 2022 following the pandemic, albeit at a different pace across segments, according to the Savills Q4 2022 Bahrain Market in Minutes report. 

 

Villa developments remain the preferred asset type, and the strong demand levels continued to push prices upwards, with an average y-o-y increase of 2% across developments. 

 

Meanwhile, capital value growth across apartments gradually slowed over the last four quarters. The price correction was more prominent across mid to low-end developments, which have seen a 2%-4% drop in values y-o-y. 

 

Average capital values across mid-end apartments are estimated at BD647 ($1,705) per sq m, whilst across low-end apartments, it is estimated at BD465 ($1226) per sq m. 

 

The rental market largely mirrored the sales market, with rental values in villas continuing their strong growth with y-o-y price increases of 4.5%, which equates to an average rental value of BD1,139/month.

 

"This appreciation occurred largely due to an increase in rental values across low-end villa products, which have risen by 20% y-o-y. We attribute this to several low-end compounds reaching full occupancy over the past year causing limited availability, and also with some landlords carrying out refurbishment works," explained Hashim Kadhem, the Head of Professional Services, Bahrain.

 

Average apartment rents, meanwhile, have been consistently stable over the past year with no price movement.

 

Swapnil Pillai, the Associate Director Research, Middle East at Savills, said Bahrain has benefitted from not only an oil-price boost, which helped GDP grow by 5.9% in 2022 but also by efforts to attract investments and diversify its economy. 

 

Non-oil revenues were 28% higher on a yearly basis, reaching BD1.065 billion in 2022. To drive future growth, Bahrain has announced a four-year strategy for the tourism sector that aims to attract 14.1 million tourists by 2026, he noted.

 

In line with growing economic activities, demand for office real estate bounced back during 2022, he added.

 

According to him, high demand levels were more prominently witnessed across Grade A assets, which have seen a healthy increase in occupancy levels throughout the year. 

 

Rental values for Grade A properties tracked by Savills remained stable, whilst rents across Grade B projects have seen the highest yearly increase as a result of spillover demand. Average rental values across Grade A assets are currently estimated at BD6.5/sqm/month.

 

Meanwhile, rents across Grade B assets were estimated at BD5.5/sqm/month, recording growth of 15% y-o-y, he added.-TradeArabia News Service