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Bahrain off-plan property market 'at standstill'

Transaction activity in Bahrain’s off-plan property market during the second quarter was at a ‘standstill’ as demand and investor confidence hit new lows, a new report said on Wednesday.
 
With more than 8,000 units coming onto the market in 2009, and nearly double this in 2010, together with a shrinking expatriate population and project delays, real estate adviser CB Richard Ellis said in its quarterly report on Bahrain that the "precise demand-supply dynamics will be unclear for some time".

"Transaction activity during Q2 2009 came to a standstill in the off-plan market, although secondary market transactions are still taking place in small numbers," the real estate services firm said in a report.
"Entering the summer and subsequent Ramadan period, it is unlikely that this situation will change with transaction activity likely to remain at historic lows."

The Gulf state's mortgage market declined in the first and second quarters, and the slowdown is likely to continue in the short term, it said.

Leading providers forecast the mortgage market to double to more than 700 million dinars ($1.86 billion) by 2012, it said.

"The mortgage market was in an embryonic stage of evolution when the current banking and finance crisis took hold, with a relatively small variety of products and options for buyers."

The number of projects cancelled in the second quarter was "minimal" compared with other regional centres, it said.

Over 400 projects worth more than $300 billion have been placed on hold or cancelled in the United Arab Emirates due to the global financial crisis, while the figure is around $20 billion in Saudi Arabia, according to Dubai-based research firm Proleads Global.

There is likely to be a significant supply increase in quality office space until the end of 2011, but little likelihood of a significant increase in demand, CB Richard Ellis added.

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