By Elsa Baxter
Latest report says oversupply of high-end homes to increase by 37% over next 5 years.
Bahrain’s demand for affordable homes is not being met, while the oversupply of high-end apartments is forecast to further increase by 37 percent over the next five years, the latest real estate report suggests.
Knight Frank said developers were failing to meet “significant pent up demand” in its Bahrain Property Highlights H1 2010 report, released on Thursday.
The firm said the situation also looked to accelerate in the short to medium term with 60 percent of Bahrain’s population currently under 30.
“Although there is significant pent-up demand for affordable housing, with 47,000 already on the government's waiting list and a young and growing population adding to demand, developers in Bahrain are failing to meet the needs of this market,” Jim Lynn, head of research and consultancy.
“Meanwhile, there is an oversupply at the high-end of the market, and with 5,000 luxury apartments currently in the development pipeline, this situation is only set to worsen."
High-end residential rental rates have yet to drop to reflect increasing vacancy rates, but sales rates for freehold properties have declined by 20 percent since 2009, the property firm said in a statement.
Frank Knight said current prices per sq m for apartments were priced at BHD1,000–BHD1,500 ($2,652–$3,978) and villas at BHD700–BD1,000 ($1,857–$2,652).
Meanwhile, the kingdom’s office stock is forecast to exceed 1m sq m by next year, the firm said.
Lynn said: "Bahrain's labour force is predicted to reach over 500,000 workers this year, with approximately 56,000 occupying over 830,000 sq m of Grade A and B office space in the country.
“This increase in demand for office accommodation has been significantly exceeded by unprecedented levels of commercial development. Therefore, average vacancy rates for prime space are set to exceed the current levels of 20 – 25 percent."
this is ridiculous... you'd think with such a small country, such a small population, things could be improved quite quickly if only the right intention was there.. bahrain's future society is being turned into a renting rather than owning one.. but they can't even afforde to rent what's available!! maybe we can go live in the malls, they're big and spacious, and cooled and lit all the time; there's food, entertainment, even employment! how lucky we are to at least have all the right infrastructure for consumerism on steroids... build me a tree-house daddy.... that's what i can afford..!
This is happening across GCC. Poor people and lower middle class people being priced out the city and land. This is not good investment. Don't take my word for it, do some research. It is documented throughout mankind's history. Look even developments in Makkah. Makkah will be beautiful but average people won't be able to buy a beverage let alone live there if quick adjustments are not implemented. All these newly created cities in GCC will have slumps and ghettos because someone has to work for these rich people unless things are balanced. It can be done look at the Scandinavians.