By Shane McGinley
Research firm DTZ says recovery in property market will be slow due to rising supply.
Residential real estate transactions in Bahrain have slumped by more than 50 percent in the last year, according to research by property advisory DTZ.
The leasehold market has been hit by the combined impact of surging supply and dwindling demand.
Juffair and Amwaj Islands have been particularly susceptible with rental levels down between 15 to 20 percent from their peak in the second quarter of last year.
With up to 23,000 apartments due to be delivered by the end of 2012 the report believes that recovery in the residential sector will be slow.
“We have moved into an era of extreme caution on the part of purchasers, many of whom have entered contracts that commit them to phased payments, against pre agreed dates," said Robert Addison, DTZ’s director and country manager of DTZ Bahrain said of the residential sector.
"However given various delays DTZ believes that this could herald a move towards phased payments, against construction milestones or much smaller pre construction payments (deposits) with the balance on delivery of the finished project.”
The retail sector is also set to see increased supply, with available space set to increase 80 percent.
Office space is set to increase by 90 percent by 2012, however DTZ report that they have already seen enquiries for office space decline by 23 per cent and 270,000 square metres of planned office space has already been cancelled or delayed over the last 12 months.
But I don't understand? The estate agent told me only 10 months ago that it would be the best investment ever! I viewed a couple of flats with her here in Bahrain and she did an amazing job unlocking the doors to all the flats. She also told me that I had do make a very quick decision regarding one of the flats as 15 people were ready to pay the asking price. The flat is still on the market though 10 months later... I guess she lost the keys so the other 15 buyers couldn't access the flat?
Good one Marcus! I can imagine what the buyers have to hear from these agents wanting to make a quick commission. I had the opportunity to buy an apt, and the way the agent was talking, I actually thought it was undervalued if I picked it up that instant. However, when I asked the agent why he was offering me a 20% discount, and he was absolutely sure it would sell for a higher price, he had that look on his face of confusion. To make matters far more interesting, I told him that I would pay him TWICE his commission, if he sold it to me first, then he bought it from me for a 15% hike in the price. Saves me the hassle of transferring money. Instead, I would GET MONEY from the agent, with the appropriate deductions. I have YET to hear from the agent again. His office says he's never on his seat, and he refuses to answer my calls. Go Figure....!!!