Affordable housing will be in the spotlight in the property sector next year, offering residences that the population can afford to purchase, and not at the price at which a developer can afford to sell, according to an expert.
But this may need government intervention and an acceptance of quicker and more cost effective construction practices, said Harry Goodson Wickes, the new Bahrain country head for leading property firm Cluttons.
“It is fair to say that it has been a difficult year for the Bahrain real estate market,” he said as the firm prepares to celebrate 35 years of operations in the kingdom.
“The global recession was already making itself felt before the beginning of 2011 and then the economy suffered from the unrest in February,” said Wickes.
“In the commercial sector the market has been characterised by an oversupply of new office space coming to the market while at the same time there has been a levelling off or drop in demand,” he stated.
As per Cluttons estimates, certain areas have benefited from the unrest while others have suffered.
Saar and Budaiya, typically family areas with many villa compounds, have seen vacancy rates increasing, whilst Jasra, Janabiya and Amwaj Islands have seen an increase in demand due to their reputation as safe areas, it said.
“Overall rates have come down but not to the extent seen in other sectors of the real estate market,” said Wickes.
“Developers have traditionally been targeting the top end of the market with a particular focus on building apartments,” he observed.
“Due to oversupply and the total collapse of the off-plan sales market, a number of developments, such as Marina West and Villamar have suffered from funding issues and have been put on hold.”
Developers, he said, have now refocused their projects towards affordable housing in order to match demand.
“Slowly things are returning to normal in the retail sector but rents have still come down in all but the very best locations,” he noted.
“Bahrain City Centre is reporting a waiting list for available units and rates are remaining flat,” Wickes pointed out.