Saudi Arabia investments account for about 80% of the Gulf investments in the real estate market in Bahrain, which is estimated at about $ 320 million. Saudi Arabia investors also come first in the region in terms of volume of their investments and direct investments in the Kingdom of Bahrain.
It is worth noting that Saudi businessmen and companies are not only the first and main arm of investment in the real estate market, but they are also on top of the list when it comes to other markets as well, such as tourism and industry, which according to the statistics of the past five years is estimated at about 260 million Bahraini dinars.
The head of the real estate committee in the Eastern Chamber Dr. Bassam Bodi said in a previous interview about the strength of the commercial relations between the two countries, “The relations of the two countries have common constants, the Kingdom of Saudi Arabia is one of the main business partners to Bahrain, and its real estate investments in the country is increasing at a noticeable rate.”
Here are the most important catalysts of Saudi Arabia investments in the Kingdom of Bahrain
Over the years, the Bahraini real estate market has become one of the most prominent real estate markets in the region attracting real estate investments especially from the Saudi side for the following reasons:
1- Strategic location
The proximity of the Kingdom of Bahrain to Saudi Arabia, whether by land or by sea, makes it the ideal market for Saudi real estate investors and Saudi Arabia investments, especially as the real estate market in Bahrain, has proved strong resistance to the economic challenges faced by the region because of the decline in oil prices.
2- Recovery and flexibility of the real estate market
Besides the fact that the construction works on the stalled real estate projects have been renewed – thanks to the hard efforts exerted by the government and the Committee to resolve this issue – many world-class real estate projects have also emerged; all of which reshaped the entire sector making it the second largest non-oil sector in the Kingdom after the banking sector.
3- A healthy investment environment
The Kingdom’s commitment to granting investors a healthy environment is what prompted the Saudi investor to invade the real estate sector in the Kingdom. Bahrain is the only country in the region that allows foreigners to own commercial assets and real estate by 100%. The absence of any taxes on income, capital gains, sales, real estate, interest, dividends, or franchise fees makes it easier for investors to own more than one property and increase Saudi Arabia investments in the sector.
4- Flexibility of regulations and legislation
It is worth mentioning that the flexibility of the regulations and legislation that protect the rights of the investor is what made the Kingdom of Bahrain a haven for many investors, especially Saudi investors. The Kingdom of Bahrain has established laws and regulations that regulate the work of the real estate sector in addition to proposing programs and general policies that help the development of the sector and simplify all of the previous and future procedures, which makes real estate investment in Bahrain one of the safest and profitable investments at the same time.
5- High return on investment
According to the chairman of the Bahrain Real Estate Development Association, the chief executive of Deyaar Al Muharraq, Aref Hajras, property prices in the Kingdom of Bahrain are the cheapest in the region and have a higher return on investment than neighboring countries where the return on investment in Bahrain is from 7% to 10% and at times it reaches 12%.
6- The High value of real estate
Thanks to the Freehold Law, which allowed non-Bahrainis to own properties in certain areas of the Kingdom (freehold areas), as well as to obtain a self-sponsorship residence permit, freehold areas in Bahrain such as Juffair and Saif and other areas became attractive to investors from all over the world. All of which leads to an increase in demand for real estate in those areas and thus an increase in their value and thus an increase in the demand of Gulf and foreign investors.