Sales transactions in Bahrain’s real estate sector registered a three percent drop in Q1 2024 as against the same year-ago period, a market report said.
While the residential sector declined slightly, the retail, industrial, and office sectors remained stable, with minor rental drops in the office sector, the latest Bahrain real estate report by Savills said.
Savills estimated the total number of sales transactions at 6,124 in the first quarter.
The report also said the value of real estate trading also decreased by 1.2 percent in 2023 to BHD1.1 billion, compared to the previous year.
However, the volume of real estate transactions jumped 24.1 percent last year over 2022, it said.
“Despite these challenges, the real estate sector continues to grow, driven by government support, rising investor confidence, and an increasing demand for real estate in the region,” the report said.
Residential sales and rental market
The report said homebuyers are becoming more strategic in the market, primarily focusing on mid-range properties, and the availability of more affordable housing options with improved amenities, shifting the market dynamics in favour of tenants.
The report pointed out that a stream of projects is expected to be handed over in 2024, which could further widen the gap between demand and supply and potentially affect capital values in the short term.
Some of the most significant completions in the first quarter of the year included Onyx Residences by Kooheji Development, Al Nasseem Phase 2 Villas by Diyar Al Muharraq, and Wadi Al Riffa by Bareeq Al Retaj.
The report also said overall rental values in the residential sector recorded marginal dips compared to Q4 2022, with rents across apartments declining by 1.3 percent and villas by one percent.
Low-end property rents, however, dropped by 5.6 percent YoY.
Bahrain office sales and rental market
Savills said the office sector experienced a quiet period during Q1 2024, with businesses renewing leases in high-quality Grade A properties.
Rental rates for high-end offices are estimated to have seen a 1.8 percent contraction during the period.
Capital values for Grade A properties remain stable due to an increase in supply, with completions like Sayacorp, Future Generation Reserve Tower, and Seef Boulevard expected in the near term.
The report said the retail rental rates have maintained stability in Q1 this year for the fourth quarter in a row, due to the festive seasons.
In the industrial rental market, the manufacturing sector remained the primary driver of demand, with an average space occupancy ranging from 1,500 to 3,000 sqm.
In Q1 2024, despite an increase of 1.2 percent YoY in rentals, average rental rates for large and medium-sized warehouses remained steady, Savills said.
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