Bahrain’s real estate market is looking to have come to a stand still over the last few months. While the global crisis won’t affect Bahrain as heavy as it does other markets, local real estate agents record flagging sales numbers saying “Prices over the past months have been fairly static, nobody is buying and nobody is selling, there’s little activity”. This was told by Mike Williams, senior director at real estate adviser CB Richard Ellis in Bahrain.
According to Williams, property buyers have been waiting for more clarifications about the global credit crunch and its impact on the Bahraini market. Areas such as Manama have already experienced slight drops in prices. The area is highly populated by expats.
In the north, various new developments are being constructed on reclaimed land but speculators worry that some of them might remain empty once built.
The problem with a quiet market is the inability of some developers to keep going if cash flow is sparse. So far the local market has been fueled by demand and an influx of new money.
One aspect that has helped the Bahrain market so far is he presence of the U.S. Navy’s Fifth Fleet. A previous ban imposed in 2004 disallowed sailor’s spouses to permanently live in Bahrain due to security fears. But this ban has now been lifted in November, allowing more people to stay in the Arabian Gulf island nation.
With a possible increasing demand in low cost housing for these families, supply is in short order right now. Not so is the middle and high class property market where the balance of demand and supply is more even.
On the commercial side, the impact has not been felt just yet with banks still expressing interest in relocating to the Bahrain Financial Harbour, a key project, which is mainly commercial. Since the property boom in Bahrain is relatively new, the fall from grace is potentially a lot less.
Meanwhile the Saudi Gazette reports that the Bahrain investment and property market enjoys a bright outlook. According to the report, the market in Bahrain is well established and matured with a young population that is promising for the future.
Gulf Daily News even went as far as reporting that the $5 billion market in Bahrain was booming at the beginning of last month, only to follow up with a bubble burst report a couple of weeks ago. Capivest, one of the region’s emerging Islamic investment institutions, unveiled a new luxury home project in Bahrain called the Saar Central, a brand new modern and luxurious villa community for the kingdom.
The exclusive development will consist of 82 upscale villas built on an area of land measuring more than 65,000 SQ. M, offering a location advantage of being close to Manama and also to King Fahad Causeway.
Given the mixed messages it seems that although the market in Bahrain is not on fire right now, it is stable enough for the meantime, leaving investors on stand by with the hopes of coming back stronger than ever once the global credit crisis calms.
Photo credits: airgap [Flickr]