Categorized | International

Real Estate Market in Bahrain Faces Potential Struggles

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Both the residential and commercial real estate markets in Bahrain are facing a mountain of challenges in the coming months. The island kingdom, which is known for its extravagant, large commercial buildings, has been crippled by political turmoil in recent years. The kingdom is now struggling to deal with issues related to oversupply, and weakening demand within both sectors of the property market.

In an effort to increase profits, many developers and builders have chosen to skimp on the costs of building properties. With demand down and land prices unfathomably high, many developers claim that they have had no choice but to reduce those costs during the building process. However, such a practice has resulted in homes that have been poorly built, further describing demand among potential homebuyers.

There is no clear indication as to when the housing market in Bahrain will improve, though there will likely be a halt in development in the coming months so as to reduce the vast oversupply that currently exists in the residential sector.

The commercial office market faces similar struggles to those of the residential housing market. Demand has plummeted over the past year, and the kingdom is now facing significant levels of oversupply. Rental rates have hit all time lows, and the possibility of recovery anytime soon looks more and more bleak.

The retail sector is also coping with its share of struggles. Regional malls, which once defined Bahrain’s retail market, are now unable to sustain themselves. Vacancy rates continue to rise, and as such, total revenue has fallen to unsustainable levels.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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