Bahrain: Price History

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Open to foreigners and sizzling hot

The Bahrain market is popping hot. Tower blocks are rising all directions – boom time is here. Buying prices have increased by 20% to 25% over the past two years, according to locally-based realtors.

Foreigners, resident or not, can now freely buy property and rent it out in Ahmed Al-Fateh, Hoora, Bu Ghazal, Seef, and Northern Manama, which are all in the capital city, Manama. Foreigners can also buy in Durrat Al-Bahrain, Amwaj Islands, and Dannat Hawar – reclaimed areas earmarked for tourist developments.

Recently, however, a bill approved by the Chamber of Deputies banned foreign nationals from acquiring more than 5,000 square metres (sq. m.) of land in Bahrain, to control rising property prices. The Shura Council has yet to approve the bill.

An archipelago made up of 30 islands, Bahrain has no desert to build on, but must reclaim land from the sea. In practice this allows almost unlimited development, without disturbing the peace of the local population. Foreigners are given a permanent resident’s permit as a result of owning property, the permit being terminated in the event of sale of the property.

Tremendous amount of investment

“There is a tremendous amount of investment here, but demand is still outstripping supply, we can’t get enough!” says Valerie Brown, the managing director of Browns Estate Agency. “It is simply the amount of contractors coming in to the island. They all have to live somewhere, don’t they?”

The rental market is almost entirely foreign-driven, and has grown greatly since the massive increase in US army numbers, who live largely in Juffair.

More recently the Saudi oil boom has meant a substantial increase in new residents, who drive across the straits rather than live in Saudi. The World Trade Centre is another attraction. Finally, the construction boom itself is fuelling rental demand.

Mortgage finance is now easily available from banks such as HSBC, Bank of Muscat, Bank of Bahrain and Kuwait (BBK), the Kuwait Finance House, etc. Most require an income earned in Bahrain, but Bank of Muscat will accept outside-sourced remittance income.

Major new developments like Amwaj Islands, a major project, are sold out.

Bahrain - more data and information

• How much tax must foreign owners pay when they rent out their property in Bahrain?
• How expensive are houses in Bahrain, compared to the rest of Middle East?
• How much rent can be earned from Bahraini property, compared to the rest of Middle East?

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posted by MXXXM | 2008-01-18

Analyst, KSA

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