In a recent study conducted last year by YouGov Global Markets Research in association with Cityscape Global under the name of “Real Estate Scale”, many investors, especially in the Gulf region, prefer real estate investment in GCC.
The real estate investment in GCC offers very promising opportunities for investors from all over the world where the sector has seen great profits despite the drop in oil prices.
“The GCC continues to occupy its place as an attractive investment location, especially for international investors. A rapidly growing population, high purchasing power and quality of life are still very attractive to foreigners looking for better jobs. All these factors provide a great framework for the real estate industry to thrive,” Dr Maher Al Shaer, CEO of Diyar Al Muharraq, said.
Among the booming real estate markets favoured by many real estate investors is the Bahraini market, which over the past years has proved its ability to overcome crises and face the various economic challenges and even adapt to them.
The real estate investment in GCC in general and in the Kingdom of Bahrain, in particular, is a safe haven for investments because it is one of the sectors that benefited from the decline in oil prices where the majority of businessmen and investors went to speculate in real estate stocks and enter in many lucrative real estate deals.
“There has been a sudden increase in real estate projects in the Kingdom of Bahrain as well as in the construction and retail sectors with new shopping malls, luxury hospitality offerings and the recovery of mixed-use developments that have already been stalled,” Al Shaer added.
On the other hand, the quarterly economic report issued by the Economic Development Board in Bahrain revealed the growth of the real estate sector by 4.5 percent during the first quarter of 2017, pointing out that selling and buying properties in the Bahraini Kingdom contributes with more than 1.7 billion dollars to the economy.
The report also indicated that real estate transactions in Bahrain increased by 15.2 percent during the first quarter of this year to a total value of 770 million dollars, an increase of 8.1 percent when compared to the same period last year.
Below we present you with the factors that contributed to the boom in real estate in the Kingdom of Bahrain.
1- The growth of the construction industry by 4.5% year-on-year and the influx of 11.6 million tourists in 2015 helped expand the sector and increase demand in both the residential and retail sectors, all of which boosted Bahrain’s reputation within the GCC as a safe haven for international real estate investors.
2- Increasing population, high purchasing power and quality of life have made the Kingdom of Bahrain a very attractive place for foreigners looking for better jobs, hence, increased demands for residential properties.
3- With the government’s decision to allow foreigners to acquire ownership of 100% of the companies in Bahrain, demand for real estate has increased, particularly in the freehold areas such as the Amwaj Islands, Abraj Al LuLu, Juffair, Durrat Al Bahrain, which has prompted many real estate developers to go to these areas and build numerous real estate projects and benefit from high demand.
4- After the Bahraini government offered 100% foreign ownership to investors and expatriates in the Kingdom with no restrictions on the movement of capital, many foreign real estate investors turned to invest in the real estate market in the Kingdom.
5- Stability of rents led to a rise in occupancy rates, which in turn affected rental revenues that increased by 21%, all of which encouraged investors to invest and double their wealth.
6- A significant increase in tourism driven by a local campaign to enhance Bahrain’s appeal as an exciting and comprehensive destination for regional and international visitors. The influx of visitors to Bahrain in recent years has contributed to increased demand for tourism services and retail facilities.