Rising cost of power and water for expatriates has started to impact rental decisions, consultancy says
Bahrain’s residential sector is experiencing a shortfall of approximately 75,000 units in 2017, according to a new report.
CBRE’s H1 2017 Bahrain MarketView report said that the country has been experiencing undersupply in its residential sector for over 25 years.
The report highlights that the demand for residential real estate in 2017 – based on population statistics and household sizes – is for 290,000 units, while only 216,000 completed units exist in the market. The report also stated that an intensive government-led strategy is already underway, and aims to close the supply/demand gap with 40,000 units scheduled to be introduced by 2020.
“One of the most active districts of Bahrain for new residential development is Juffair, where there are a number of large-scale residential tower projects under construction and planned for completion in 2017 and 2018,” said James Lynn, director at CBRE. “This is anticipated to lead to a significant increase in freehold supply for the next two years in this area of Bahrain (Juffair).”
With regards to rental rates, the CBRE report found that residential rents remain among the highest in the Seef District, including Reef Island, due to its proximity to shopping malls, offices, and other services and entertainment options.
The cost of power and water utilities for expats was found to have an impact on rental decisions. “Consideration of home sizes, room layouts and general energy efficiencies within properties are now key factors in the home selection process, more than before,” explained Lynn.
The residential sector – in terms of the number of properties – was found to have grown in early 2017. The report states that work was completed on several Faqeeh developments, including The Grand and The Tweet in Seef, as well as The Nest in Sanabis. Fontana Gardens by Royal Ambassador also recently opened for business.
The quantity of villas on the market grew as well; the report noted that villas on Dilmunia Island were now being handed over, and beginning to appear on the rental market. The Sharq was named as a key development due to opening later in the year, while completion of the entire project is expected in 2020.