Bahrain residential rent growth rate dips to 6.7% in Q3 – Cluttons
Rental growth is forecast to decline over the next six to 12 months
The annual growth rate of Bahrain residential rents fell to 6.7% in the third quarter from 6.9% in the preceding three months, according to a report by Cluttons.
The property consultancy noted that the fall was due to a 0.1% dip in average rents in the kingdom’s prime residential areas. Apartment prices were behind the slight decline, although the fall was confined to the Al Seef area.
The Cluttons report said that rental growth is expected to decline going forward.
“It is our view that rent falls are likely to accelerate over the next six to twelve months, with an average decline of 3% to 4% expected,” says Harry Goodson-Wickes, Head of Cluttons Bahrain.
In the sales market, average residential capital values in Bahrain’s prime residential submarkets slipped by 0.7% in Q3, following a 4.6% drop in Q2.
The report notes that the latest change now means that values have, on average, fallen by 5.3% during the first nine months of this year.
“The sales market is expected to mirror this trend, with a petering out of demand the key risk to the performance of the market, particularly among Saudis, which drives the bulk of deal activity,” said Goodson-Wickes. “With weak oil prices set to persist, the disposable incomes of this critical buyer pool is likely to start diminishing, thereby undermining overall buyer requirement levels.”