Jun 28 2014
Photo Credit:REUTERS/Hamad I Mohammed
Saturday, Jun 28, 2014
Dubai:After a tough couple of years, Bahrain’s residential sector is finally starting to tread on stable ground. An improving economy, buoyed by the government’s investment overdrive, has been a catalyst in the improvement.
Rents too are edging up after being flat all through the fourth quarter of last year, according to a new report from Cluttons. But even then it was only with villas that there was an increase, by 1.5 per cent, while those of apartments did not see any movement. (Last year, the overall residential rental values were up 2.4 per cent.)
Significant demand continues to be driven by the ‘US Navy’s regular rotation of personnel, which is aiding in the generation of churn and activity in the market’, the Cluttons report said. “In our experience, the hydrocarbon sector is the only other notable generator of new jobs and therefore tenants.
“With the economy still working its way to full strength and the sectors creating new jobs still limited, we do not anticipate a rapid turnaround in the level of inquiries in the short term”.
Among locations, Amwaj Islands and Al Juffair remain the priciest submarkets within Manama.
“Once we begin to approach that point, a broadening in the tenant base is expected as multiple sectors begin to expand simultaneously, which will inevitably boost the performance of the lettings market, the report said. For now, with landlords very much on the back foot, rents are not expected to stage a major comeback over the course of 2014.
“Furthermore, with budgets remaining largely stable, most landlords are keen to attract and retain tenants and have shown greater flexibility around asking rates. This is expected to further dampen prospects of any sudden surge in apartment rental value growth rates’.
At the off-plan level too, there have been gains. With increased market activity, off plan sales are picking up once more,” said Harry Goodson-Wickes, Cluttons’ head of Bahrain operations.
“For instance, the new 405-unit Fontana Gardens scheme in Juffair launched in early February and off-plan prices currently stand at around BD900 per square metre, similar to the rates being achieved in the completed Fontana Towers.”
Staff Report
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