Bahrain real estate 'still has potential'

MANAMA POTENTIAL: Real estate firm CB Richard Ellis remains upbeat about Bahrain's future. (Getty Images)

There is “tremendous” potential for real estate in Bahrain but now is not the time to sell, real estate services firm CB Richard Ellis (CBRE) has said.

Mike Williams, senior director at CB Richard Ellis in Bahrain, said the situation in the kingdom was different from in the UAE, where real estate prices have begun to slide.

“Very few want to commit to the real estate market at the moment because its cyclical nature is well documented, swinging from peaks to troughs as economic circumstances change. The fear is that we are on a peak looking down at a trough,” he said.

The majority of new homes in the Kingdom have been bought by owner-occupiers and speculator activity has been restrained, although it does exist.

Price gains have also been capped by a narrow range of relatively expensive mortgage products.

As soon as real estate sentiment improves in the region, new mortgage products could help boost prices in Bahrain, Williams said.

“Selling now would be unfortunate as we see tremendous potential for the real estate market in Bahrain once we have made it past the current slowdown.”

By contrast, the chief executive of Islamic mortgage lender Sakana Holistic Housing Solutions said the Bahraini market could fall by as much as 25 percent next year.

“Depending on the area, we are already talking about adjustments of 10 to 15 percent,” R Lakshamana told Arabian Business on Tuesday.

Rents are still rising in Dubai and Abu Dhabi, despite downward pressure on prices, Williams of CBRE noted.

“Rents in both cities are still on the rise and indicate that even in the context of falling house prices, there is a shortage of housing. The key issue is sentiment,” he said.

CBRE is the world’s largest commercial real estate services company, managing 1.9 billion square feet of building space in more than 50 countries.

Sakana Holistic Housing Solutions is a 50:50 joint venture between The Bank of Bahrain & Kuwait (BBK) and Shamil Bank.

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