The real estate sector in Bahrain is currently attracting Arab, Gulf, and international investors due to an improving investment environment, especially following the country’s success in controlling the Coronavirus pandemic. The recent introduction of the “golden residency” should increase investments in the properties sector.
The “golden residency” is among the most important decisions the country took towards its economic recovery plan. It allows residents and non-residents alike, including top investors, to own and reside permanently as well as move to reside with their families.
This decision could prove to be a motivating factor for retirees in other countries, providing them with an option to choose Bahrain as a retirement destination for themselves and their immediate families.
Numbers and forecasts
According to statistics by the Real Estate Registration Authority in Bahrain, 2021 saw Gulf investors increase their investments to 38 million dinars (about $100 million), compared to 14.89 million dinars in 2020, a growth rate of 156 percent. Transactions from non-Gulf foreigners jumped by 180 percent to reach 57.76 million dinars (about $153 million),
On a monthly rate, real estate sales in January dipped to about 75 million dinars, compared to sales of 110 million dinars for the month of December 2021, a decline of 31.6%, according to the agency’s data.
The number of real estate transactions decreased in January 2022 to 1,517 real estate transactions, compared to 2,172 real estate transactions in the previous month, with a drop of 30.15%.
But this is about to change. It is expected that real estate investments will rise during the current year to more than 1.2 billion dinars after it reached about 1.04 billion dinars in 2021, the highest level since 2016.
The head of the real estate committee in Bahrain Businessmen Association, and former president of the Bahrain Real Estate Association, Nasser Al-Ahly, expects that the rate of purchase of real estate by foreigners will increase during the current year, as 60 percent of the real estate projects launched in 2021 have been sold, while it is expected that the new “golden residency” decision will help sell the remaining percentage to foreigners.
According to real estate experts, there are many factors that could motivate a foreigner to move and reside in Bahrain, including the minimum price of a property, set at 200,000 Bahraini dinars, which is a reasonable price to own real estate in some of the high-end projects in Bahrain, knowing that a golden residence holder can work in any business field they wish in Bahrain
A close relationship between oil prices and the real estate sector
Statistics show there is a close relationship between oil prices and transactions in real estate sector in Bahrain. For example, when oil prices reached their peak in 2007 and 2008, real estate trading in the same period experienced an unprecedented boom, and when oil prices collapsed, property trading suffered as a result.
The same thing happened in 2014 when oil prices reached record levels, and again in late 2021 as crude prices began to rise again, real estate activity followed.