Rents in parts of Bahrain slumped by up to 30 percent during the recent uprisings in the kingdom, real estate experts Cluttons said on Monday.
The dramatic fall in values forced landlords to offer incentives to tenants in a bid to maintain occupancy levels, Cluttons said in a new report on the performance of the property market in the second quarter of 2011.
Released at a time when measures to restore political stability in the country are being taken, the report said the national dialogue was “good news as the country seeks to reverse the adverse effects on the country’s economy”.
Stefan Burch, head of strategic consultancy for Cluttons, said: “If the current political stability ensues, I am convinced that a great deal of confidence will return to the Bahraini economy.”
He added: “One of the major challenges that still remain is of the efficient provision of affordable housing for Bahrainis. However, the good news is that with a large proportion of the GCC funds allocated to the housing sector, government policies are reacting to meet this challenge.”
The report said that the recent unrest had affected the residential market across Bahrain.
A shift in demand in the leasehold market has caused rent reductions of up to 30 percent in certain areas, the report added.
In the short term, Cluttons predicted that the market will remain tenant friendly as rents look set to stabilise at current levels.
Burch said: “In the short to medium term we believe that supply will continue to outstrip demand, allowing tenants the opportunity to benefit from rent free periods and increased services. Gradually, the market will become increasingly two tiered as lifestyle developments succeed in attracting more and more occupiers.”
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