Authored by the expert who managed and guided the team behind the Bahrain Property Pack
Everything you need to know before buying real estate is included in our Bahrain Property Pack
Are you considering investing in Bahrain's property market? Curious about the emerging trends that could shape your investment decisions by 2025? Want to know which areas are poised for growth and what factors are driving these changes?
We will lay down recent insights, providing you with a clear picture of the future landscape. Ici no guesswork, we rely only on solid data to guide your property investment journey.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Bahrain Property Pack
1) Bahrain residential property prices will stabilize soon offering a predictable market for investors
Bahrain's residential property market is stabilizing after a period of fluctuation, making it more predictable for investors.
One reason for this stability is the 8% year-on-year increase in villa sales in 2023, mainly driven by local buyers looking for affordable homes. This trend is supported by Bahrain's record-breaking $6.8 billion in foreign investment, which has helped steady the market.
The government has also been instrumental in this process. By investing heavily in infrastructure, like the $1.1 billion passenger terminal, Bahrain has boosted tourism and economic growth. Being named the GCC tourism capital for 2024 is expected to further increase demand for homes, adding to market stability.
Economic improvements are another factor. Bahrain's real GDP grew by 3.3% in Q1 2024, showing the country's success in moving away from oil dependency. This growth has led to more jobs, which in turn supports the housing market.
Investment-friendly laws and free zones make Bahrain an attractive spot for international investors. These policies have contributed to the stability of the real estate market, drawing more interest from abroad.
Overall, these elements combine to create a more predictable and stable property market in Bahrain, offering a promising landscape for potential buyers.
Sources: Zawya, AGBI, Cityscape Intelligence
2) Affordable housing prices will drop as new projects boost supply
Bahrain is buzzing with new housing projects, making it an exciting time for potential property buyers.
In August 2024, the China Machinery Engineering Corporation snagged a contract to build 1,269 new homes in Sitra, part of Bahrain's push to speed up housing developments. The Ministry of Housing and Urban Planning is on a roll, with thousands of units already completed in earlier phases.
As these new homes hit the market, the supply of available properties is set to rise. CBRE Middle East predicts a 7% growth in freehold apartment stock for international investors by the end of 2024. This boost in supply could mean a slight dip in housing prices, giving buyers more choices and potentially easing price pressures.
Affordable housing is getting a lot of attention, thanks to initiatives like the Mazava Social Housing Finance Program. This program is all about offering more budget-friendly options for Bahraini nationals. With more affordable projects underway, the market might see a slight drop in prices as supply catches up with demand.
Real estate agencies are already noticing a trend: rental rates for mid- to high-end apartments are on the decline. This suggests that affordable housing prices could adjust too, making it a good time to keep an eye on the market.
Sources: Gulf Construction Online, CBRE Bahrain, Cityscape Intelligence
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3) Foreign buyers will flock to Diyar Al Muharraq for its all-inclusive amenities.
Foreign buyers are flocking to integrated community projects like Diyar Al Muharraq because they offer a complete living experience.
These communities are a one-stop-shop, combining residential, commercial, recreational, and healthcare facilities all in one place. This setup is perfect for those who want convenience and a balanced lifestyle without the hassle of traveling far for daily needs.
Take Diyar Al Muharraq, for example. Its popularity is clear from the numbers: occupancy rates jumped from 59.6% in June 2023 to 74.8% in June 2024. This shows how much buyers love the idea of having everything at their doorstep.
Souq Al Baraha, part of the Diyar Al Muharraq project, is buzzing with activity, drawing in crowds who appreciate the comprehensive amenities available. It's not just about living; it's about enjoying a vibrant community life.
The growing expatriate population in Bahrain, thanks to a 24.7% increase in international arrivals in 2023, is also driving demand for these integrated living solutions. They want a hassle-free lifestyle, and these projects deliver just that, with shopping, dining, healthcare, and leisure all in one spot.
Infrastructure development is another big draw. Projects like Al Naseem are getting foundational infrastructure upgrades, ensuring residents have access to modern amenities and services. This makes places like Diyar Al Muharraq even more appealing to foreign investors.
Sources: Gulf Construction Online, Diyar Al Muharraq Press, Biz Bahrain
4) Saar property values will rise as it becomes a top spot for luxury villas and gated communities
The Saar area is becoming a hot spot for luxury villas and gated communities, leading to a rise in property values.
In Bahrain, the luxury residential market is on the upswing, with expectations to grow from USD 279.82 million in 2024 to USD 376.39 million by 2029. This surge is fueled by a strong appetite for upscale living, as seen in the 8.5% increase in villa prices during the first half of 2023. Neighboring areas like Manama, Muharraq, and Riffa have already become investment magnets, suggesting a spillover effect that could benefit Saar.
The Bahraini government's Strategic Projects Plan, launched in 2021, is set to boost Saar's appeal by enhancing transport and logistics infrastructure. This plan includes major infrastructure developments that will make the area more accessible and attractive to potential buyers.
New luxury villa projects such as Marassi Park and Marina Bay are popping up, showcasing the ongoing development of premium residential communities in Bahrain. These projects, combined with the country's 100% exemption from income tax on rental income, are drawing in expatriates and high-net-worth individuals, further driving demand for luxury properties.
With these developments, Saar is poised to become a preferred location for those seeking a luxurious lifestyle. The area's transformation is not just about new buildings; it's about creating a community that offers exclusivity and comfort.
Sources: Cityscape Intelligence, Oxford Business Group, Mordor Intelligence
5) Foreign investors target luxury developments in Bahrain Bay as status symbols
Foreign investors are flocking to Bahrain Bay for its luxury developments, which have become a status symbol.
The launch of the Four Seasons Private Residences in Bahrain Bay is a big deal, offering 112 custom-designed homes that scream luxury. These homes come with perks like exclusive access to the Four Seasons Hotel, where you can enjoy resort-style amenities, dine at multiple restaurants, and relax on a pristine beach.
In 2023, Bahrain saw a record-breaking $6.8 billion in foreign direct investment, a whopping 148% jump from the previous year. High-net-worth individuals, especially from Kuwait, are leading this charge, showing a keen interest in Bahrain's luxury real estate.
Bahrain Bay is often in the spotlight, thanks to media coverage that paints it as a prestigious locale. This buzz attracts affluent individuals from around the globe who are on the hunt for luxury living experiences.
Iconic landmarks like the Bahrain World Trade Centre and the Manama Skyline add to the allure, making Bahrain Bay a hot spot for those wanting to invest in high-end properties.
For those in the know, owning property in Bahrain Bay is more than just real estate; it's a statement of prestige and exclusivity.
Sources: Hotel and Catering, AGBI
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6) Rents in the Diplomatic Area will drop as commercial spaces take over the area
The Diplomatic Area is experiencing a real estate transformation.
In the second quarter of 2023, rental prices for low-end and mid-end apartments dropped by 2% to 6% compared to the previous year. This decline hints at a waning interest in residential rentals. Meanwhile, the area is buzzing with new commercial real estate projects. The Urban Planning and Development Authority Procedures Manual shows a clear focus on large-scale, multi-use urban developments, signaling a shift towards commercial spaces.
Government policies are also nudging this change, as they now favor commercial zoning over residential, according to the Unified Planning Procedures Manual. Real estate agents are noticing that more businesses are moving into the Diplomatic Area, which is further decreasing the demand for residential rentals. The Bahrain Real Estate Market Review for Q2 2023 backs this up, showing a rise in commercial transactions.
These changes are not just on paper. Anecdotal evidence from local real estate agents suggests that businesses are actively relocating to the Diplomatic Area, making it a commercial hub. This shift is evident in the increased commercial transactions, as noted in the Bahrain Real Estate Market Review for Q2 2023. The area is becoming more attractive for businesses, which is reshaping its real estate landscape.
As commercial spaces take over, the Diplomatic Area is evolving into a business-centric zone. This transformation is supported by government policies and planning manuals that emphasize commercial development. The Unified Planning Procedures Manual, for instance, outlines a preference for commercial zoning, which is reshaping the area's real estate dynamics.
With businesses flocking to the Diplomatic Area, residential rental demand is taking a backseat. This trend is evident in the declining rental values and the surge in commercial real estate projects. The area's transformation is a clear indication of its growing appeal as a commercial hub.
Sources: Zawya, Urban Planning and Development Authority Procedures Manual, CBRE Bahrain Real Estate Market Review
7) Rental yields in Seef district will rise with growing demand for high-end apartments
Rental yields in the Seef district are set to rise as more people seek high-end apartments.
In recent years, rental prices in Seef have been climbing. The CBRE's Bahrain Real Estate Market Review from Q1 2023 highlights a noticeable uptick in both apartment sales and rental rates. This is largely due to the district's allure for international buyers and the ongoing development of luxury housing projects.
High-end apartments are seeing a significant boost in occupancy rates. Young professionals are particularly drawn to areas like Seef, where they can enjoy a blend of shopping, dining, and leisure. This trend is pushing up demand for upscale living spaces, which in turn is likely to increase rental yields.
Property transactions in Seef have also been on the rise. In the first quarter of 2023, Bahrain saw a 14.5% year-over-year jump in real estate transactions. This surge reflects a growing interest in the market, especially in luxury-focused districts like Seef.
Sources: Knight Frank, CBRE
8) Demand for high-rise apartments will drop as buyers want more spacious homes
In Bahrain, housing preferences are shifting towards more spacious living options.
In 2023, villa prices jumped by 8.5%, while apartment prices only saw a modest increase of 2.5%. This trend shows a growing interest in villas and townhouses, which typically offer more room to breathe.
By 2024, villa sales had climbed by 7.8% annually, fueled by a strong local demand for affordable, larger homes. Families are clearly prioritizing space, opting for bigger living areas and outdoor spaces over prime locations.
The rise of remote work is a game-changer, as more people need home offices, which are easier to set up in larger homes like villas. Expatriates are also leaning towards low-density areas, further boosting the demand for spacious living.
Media outlets have been buzzing about lifestyle changes post-pandemic, highlighting the newfound importance of having more room. This shift in what people want is likely to keep pushing the demand for villas and townhouses.
Sources: Cityscape Bahrain, Arab News, Mordor Intelligence
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9) The growing expatriate community will drive up demand for rentals in central locations
Bahrain is becoming a hotspot for expatriates, boosting the demand for rental properties in central areas.
In 2023, Bahrain was celebrated as the top destination for expatriates in the Middle East, drawing many to the country for work. This trend is still strong in 2024, with more expatriates looking for homes. The influx is not just about numbers; it's about the lifestyle and opportunities Bahrain offers, making it a magnet for those seeking a vibrant community and career growth.
Adding to this, Bahrain saw a record-breaking USD 6.8 billion in foreign direct investment in 2023. This influx has brought multinational companies to set up regional offices, which means more employees needing places to live. The government is also playing a part by introducing policies like the Golden License, which encourages foreign investment and residency, creating thousands of jobs and attracting even more expatriates.
New residential projects are popping up, especially in central areas, aimed at expatriates. This shows a clear growing demand for housing. Real estate reports highlight rising rental prices in these areas, a direct result of the increased demand from the expatriate community. The government is also enhancing infrastructure and services in these central locations, making them even more appealing.
As Bahrain continues to develop, the demand for rental properties in central locations is expected to keep rising. The combination of a welcoming environment for expatriates, strong economic growth, and strategic government policies is creating a perfect storm for the real estate market.
Sources: Zawya, Bahrain EDB
10) Bahrain's residential market will surge in Amwaj Islands for its waterfront lifestyle and new amenities
The Amwaj Islands in Bahrain are becoming a hot spot for real estate, thanks to their waterfront lifestyle and new amenities.
Imagine living in a place where you can enjoy luxury apartments and villas, all part of a $1.5 billion investment in the Amwaj Islands project. This development is happening in phases, with the latest being the Tala Islands, which offer 48 beachfront villas, 42 two-storey villas, and 410 apartments.
What makes Tala Islands even more attractive is the addition of an aqua park, retail areas, a sports centre, a tennis club, and a variety of restaurants and coffee shops. These amenities, backed by a $110 million investment, are perfect for those who love a lifestyle-oriented community. Plus, the Amwaj Marina offers beach club facilities and water sports, making it a great spot for families and individuals who crave a vibrant waterfront experience.
Getting to Amwaj Islands is a breeze, thanks to government-backed infrastructure projects. A 3km causeway connects the island to Muharraq Island, and a new ring road highway on the mainland makes it just 8km from Bahrain International Airport. This improved connectivity is a big draw for potential residents, especially expatriates who love waterfront living.
Expatriates, who make up a significant part of Bahrain's population, are particularly drawn to the Amwaj Islands. The combination of luxury living, modern amenities, and easy access to the airport makes it an ideal choice for those seeking a new home in Bahrain.
Sources: Knight Frank, Amwaj Marina, World Construction Network, AGBI
11) Aging population boosts demand for accessible senior-friendly housing
Bahrain is seeing a rise in life expectancy, especially among those aged 60 and above.
As people live longer, the number of individuals aged 65 and over is on the rise. In 2023, there were over 32,000 men aged 65 and above, and this number is expected to grow. By 2024, the population aged 75 and above also increased, showing a clear trend towards an aging population.
With more seniors, there's a growing need for housing that caters to their needs. Government reports highlight that the senior living market in Bahrain is set to expand, driven by the increasing number of older adults and their longer life spans.
For potential property buyers, this means considering homes that are accessible and senior-friendly. Features like single-level living, wider doorways, and step-free access are becoming more desirable.
Investing in properties with these features could be a smart move, as the demand for such homes is likely to increase. Developers are already responding by incorporating these elements into new builds.
Understanding this trend can help you make informed decisions when buying property in Bahrain. It's not just about location anymore; it's about meeting the needs of an aging population.
Sources: Mordor Intelligence, Trading Economics
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12) Young professionals will boost demand for modern urban apartments
Bahrain is becoming a hotspot for young professionals, driving up the demand for modern living spaces.
In 2023, Bahrain was recognized for its commitment to youth, ranking 2nd in the Arab World and 3rd in MENA on the Global Youth Development Index. This focus on youth development and job opportunities is attracting more young professionals, naturally boosting the need for housing.
Looking ahead to 2025, Bahrain's real estate market is set to see rent increases between 2.6% and 4.8%. This growth is particularly noticeable in urban areas, where young professionals are flocking for work and lifestyle perks. Developers are responding by creating new residential projects that cater to this crowd, offering modern apartments with attractive amenities.
The expatriate community in Bahrain has bounced back, exceeding pre-pandemic numbers by the end of 2022. This surge adds to the demand for contemporary urban apartments. Both local and expatriate young professionals are drawn to city life for its job prospects and vibrant lifestyle, mirroring a global trend towards urban living.
Urban centers in Bahrain are buzzing with activity, as young professionals seek out modern apartments equipped with lifestyle facilities. This demographic shift is reshaping the housing market, with a clear preference for city living.
Sources: Bahrain EDB, PwC, NAAHQ
13) Tubli's strategic location and improved infrastructure will drive high demand
The Tubli area is becoming a hot spot thanks to its prime location and upgraded infrastructure.
In recent years, the Bahraini government has poured resources into Tubli, notably expanding the Tubli Sewage Treatment Plant and building a new sewage sludge incineration facility. This project, worth BD78 million ($207 million), is part of the Gulf Development Programme, with funding from Saudi Arabia and Kuwait. These improvements are not just about better sewage management; they signal a commitment to enhancing the area's livability.
What makes Tubli even more appealing is its proximity to major commercial and business hubs in Bahrain. This strategic location means you're never too far from the action, whether it's for work or leisure. The improved connectivity, with easy access to public transportation like buses, taxis, and ride-sharing services, makes it a convenient choice for both locals and expatriates.
With the expansion of the Tubli STP, the area now boasts advanced wastewater management technologies. This upgrade not only boosts the treatment capacity but also promises a better quality of life for residents. It's a clear sign that Tubli is gearing up for a future where essential services are top-notch.
For those considering a move, Tubli offers a blend of modern infrastructure and strategic location. The area's development is a testament to Bahrain's vision of creating vibrant, well-connected communities. As Tubli continues to grow, it's poised to become a sought-after destination for property buyers.
Sources: Gulf Construction Online, Hello Mondo, Zawya
14) New regulations will drive sustainable building practices and transform property design and construction
New regulations are reshaping property design and construction by promoting sustainable building practices.
In 2023 and 2024, the Bahraini government rolled out financial incentives like reduced utility rates and tax benefits for green building certifications. These perks made it more attractive for developers and homeowners to go green, offering tax breaks and waivers on building permit fees. This shift is not just about saving money; it's about creating a more sustainable future.
There's been a noticeable uptick in the use of eco-friendly materials such as recycled steel and bamboo, which are known for their lower carbon footprint. This change is largely driven by consumer demand, as more people are leaning towards eco-friendly properties. The construction industry is also seeing a boost in renewable energy projects, with many buildings now incorporating solar power to generate electricity.
Media coverage has been instrumental in showcasing the benefits of sustainable architecture. The Bahrain Green Building Council has been actively raising awareness and providing training to ensure that everyone is on the same page. The inclusion of sustainability criteria in national building codes means that new constructions must meet energy efficiency and waste management standards.
Educational programs and public-private partnerships are playing a big role in this transformation, fostering a collaborative approach to sustainable development. These efforts are not just about meeting regulations; they're about creating a culture of sustainability that benefits everyone.
Sources: Constructive Voices, Constructive Voices, NAHB
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15) Diyar Al Muharraq will keep attracting investors with its integrated community living concept
Diyar Al Muharraq is a hot spot for property investors in Bahrain.
In 2024, it was the most traded real estate project in the country, showing a strong buyer interest that bodes well for future investments. Its strategic location in Muharraq offers easy access to essential amenities like schools, shopping malls, mosques, and parks, making it a top choice for families and individuals seeking convenience and a well-rounded lifestyle.
The development's integrated community living concept is a big draw, with facilities that support a balanced life. This approach is increasingly popular among buyers who value a sense of community and easy access to daily necessities. The presence of these amenities not only enhances the living experience but also boosts the property's appeal.
Diyar Al Muharraq's commitment to community engagement and social responsibility has earned it accolades, such as the "Community Engagement and Inclusion" award at the Bahrain Smart Cities Summit 2024. This recognition highlights the development's focus on creating a satisfying living environment, which is crucial for attracting and retaining residents.
Investors are particularly interested in Diyar Al Muharraq because of its strong community focus and the promise of a vibrant, integrated lifestyle. The development's ongoing popularity and strategic planning ensure it remains a top choice for those looking to invest in Bahrain's real estate market.
Sources: Gulf Construction Online, Biz Bahrain, Zawya
16) Muharraq Governorate's real estate will surge from cultural and heritage tourism initiatives
The Muharraq Governorate is gearing up for a real estate boom thanks to its cultural and heritage tourism initiatives.
In recent years, the Bahraini government has been pouring resources into projects like the pearling path, which is all about revitalizing old Muharraq through sustainable tourism. This isn't just about preserving history; it's about breathing new life into the city's historic areas. With Muharraq being recognized as a UNESCO World Heritage Site and named the 'Capital of Islamic Culture' in 2018, visitor numbers have soared, drawing more eyes to its rich history.
This influx of tourists has sparked the development of new hotels and accommodations, meeting the rising demand for places to stay. As a result, property prices near these cultural hotspots are climbing, showing a clear uptick in real estate interest. The government is also sweetening the deal for property developers with incentives like tax breaks and subsidies, making it even more attractive to invest in Muharraq.
International investors are taking note, driven by the potential for growth in the real estate market. The buzz around Muharraq's cultural attractions is amplified by increased media coverage and international partnerships. This is creating a perfect storm for real estate activity, with significant interest from abroad.
Locals and investors alike are seeing the potential in Muharraq, where the blend of culture and commerce is creating a unique opportunity. The city's transformation is not just about tourism; it's about creating a vibrant community where history and modernity coexist. With these initiatives, Muharraq is becoming a hotspot for real estate, offering a promising future for those looking to invest.
Sources: News of Bahrain, Rehlat, Gulf Construction Online, ICCAUA Conference
17) Seef district will draw more investors as it becomes a mixed-use hub with homes shops and leisure spots
In 2023, the Seef district in Bahrain saw a 65.4% increase in real estate transactions, showing a surge in interest.
Seef is becoming a hot spot for property buyers, even though the total value of transactions dipped slightly. This means more people are snapping up properties, seeing potential in the area.
What's driving this buzz? Seef is transforming into a mixed-use area, blending residential, commercial, and leisure spaces. This shift is pushing property prices higher than in other parts of Bahrain, making it a prime spot for investment.
The government is on board too, boosting Seef's appeal with new infrastructure projects. They're adding better transportation links and connectivity, which makes life easier and business smoother for everyone moving in.
With these changes, Seef is not just a place to live or work; it's becoming a lifestyle hub. The mix of amenities and improved access is drawing in both residents and businesses, raising property values and making it a smart choice for investors.
As Seef continues to evolve, expect more investors to take notice. The district's transformation is setting the stage for a vibrant community, attracting diverse investments and promising growth.
Sources: Zawya, Ministry of Finance and National Economy Bahrain
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18) Virtual reality tours are now essential for property viewings attracting tech-savvy buyers
Virtual reality tours are revolutionizing the real estate market, especially for those who love tech.
Back in 2023 and 2024, the virtual tour market was booming, growing from $10.52 billion to $12.38 billion in just a year. This surge was thanks to a 15.6% annual growth rate, showing how VR tech is catching on worldwide in real estate.
In Bahrain, nearly everyone is online, with a mobile internet penetration rate of 97.87%. This tech-savvy crowd, especially young adults aged 18 to 34, are 130% more likely to book a property if it has a virtual tour. This shift towards younger buyers is driving the need for more immersive property experiences.
The country's strong digital backbone, thanks to the National Broadband Network, makes VR tech easy to use. This digital shift aligns with the preferences of 67% of home buyers who want virtual tours when checking out listings.
Real estate companies are jumping on this trend, offering virtual tours to meet the demands of tech-oriented buyers. This move is not just a trend but a necessity, as more buyers expect to see properties virtually before making decisions.
With such a high demand for virtual tours, it's clear that this technology is here to stay, making property buying more accessible and engaging for everyone.
Sources: PhotoUp, SAMENA Council, Market.us
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.