Thinking of investing?
If you’re looking at Bahrain as an investment opportunity, it’s an increasingly wise decision. Bahrain has a fast developing real estate sector that currently offers unrivalled property investment opportunities with the potential for substantial short-term growth and significant long-term yields. As Bahrain concentrates on developing its economy in five prime business areas so the international population of the country is growing fast with the Kingdom’s infrastructure improving and the appeal of this Persian Gulf island nation intensifying – together combining to create a sustained interest in the property sector.
The five main economic areas that the Bahrain Government is successfully targeting in a bid to replace their current oil dependent income are:
- Business and financial services
- Tourism
- Information technology
- Telecommunications
- Healthcare and education
The growth of these five key areas acts as a catalyst for real estate sector development and is being realised by an increasing number of international executives and employees relocating here to establish business enterprises or to take up employment and residence.
As developments are sold and international interest in Bahrain rises, Bahrain is becoming a business and tourism destination of note, prices for property available for sale freehold to the international buyer and investor are soaring. Likewise, the rental rates chargeable in Bahrain are increasing in line with an increase in demand – therefore the long-term prospects of investment property in Bahrain are exceptional.
Since 2001, it has been possible for foreign investors to purchase real estate in Bahrain, following a royal declaration. In 2003, following intense demand from overseas, this was fully sanctioned and endorsed through legislation so that foreign buyers could own real estate in areas designed for foreign ownership. This demand for high-quality accommodation in Bahrain has not diminished since and, as a result, a large amount of investment is being poured into improving infrastructure and services – and thus developers are selling on fully serviced sites for development. Many major residential developments are in the pipeline in Bahrain and because the property sector lacks fashionable appeal at the moment, the off-plan prices are especially attractive.
Local interpretation of the rules relating to foreign freehold ownership of property in Bahrain sees overseas’ investors purchasing any type of residential property on any reclaimed land development in the Kingdom.
According to the original terms of the royal declaration however, a foreigner wishing to purchase freehold property in Bahrain – whether for investment or residential purposes – was permitted to buy residential or commercial property in five specifically designated areas of the capital city of Manama. The five areas include Ahmed Al Fateh, Hoora, Bu Ghazal, and parts of northern Manama such as the Diplomatic Area. Since the declaration was ratified in 2003, the Seef district has become the most popular with foreign buyers and it has enjoyed property price gains of up to an incredible 400%.
How does foreign ownership work?
Because of the popularity and success of certain property developments in these designated areas of the Kingdom of Bahrain, the government has subsequently issued an increasing number of licenses to companies for land reclamation and it is on this reclaimed land that the newest and most popular property developments are being constructed. As a foreign investor wishing to get in on the booming Bahraini property market these are the developments to focus on.
In terms of the property buying process in Bahrain it proceeds in a similar way to the majority of buying processes worldwide. As an investor, you are advised to seek independent legal assistance throughout the entire purchase process. The legal property ownership rights in Bahrain are sophisticated and well developed meaning as the purchaser, you are protected once permission to purchase has been granted and deeds of ownership are transferred into your name.
If you’re purchasing pre-construction be advised that a holding deposit will be required upon contract closure and that stage payments will be due throughout the build process at fixed construction junctures – with a final amount retained by you until property handover has been completed.
The amount of investment property available for sale in Bahrain to overseas investors is physically restricted by the small land mass of the Kingdom and by the fact that freehold ownership is only allowed in certain areas of the country – therefore it is this restriction of supply that will ultimately push up prices because the demand for real estate for sale to international investors and expatriates living in Bahrain is not abating.
What’s life really like in Bahrain?
An island nation in the Persian Gulf that has always had strategic importance, especially regarding trading. These days, Bahrain trades pearls for property with an emerging real estate economy providing incredible opportunities for property investors and developers alike.
The economy of Bahrain, previously driven by oil has quickly been diversified; the Kingdom’s government understood and reacted to the requirement for economic change very swiftly. Today, supplementing a successful petroleum processing industry is a fully focused service-based economy reflected by a buoyant financial industry and a flourishing real estate business. This successful diversification is personified by a luxury real estate sector emerging as many premium offshore island developments begin to take shape.
Geographically, Bahrain is located east of Saudi Arabia and is connected to Saudi via the King Fahd Causeway. To the south of the country is Qatar and currently the two nations are in the process of constructing what will be the largest fixed link in the world when completed, namely the Qatar – Bahrain Friendship Bridge.
Bahrain is a Kingdom with a constitutional monarchy, a prime minister and parliament and adopts one of the most forward-thinking and liberal approaches in the region. Depending on the area of the country you reside in, it can either feel very cosmopolitan and modern or incredibly traditional. The capital of the country is Manama, a city inhabited by many expatriates who generally enjoy an excellent standard of living.
The multinational expatriate communities have access to English language TV and so don’t struggle with the Kingdom’s official Arabic language. This is reinforced because English being the international business language is very widely spoken and used daily in the offices of Bahrain.
The quality of life achievable for westerners is first class, with access to state of the art cinemas, golf courses, ice rinks, go-karting centres, bowling alleys, a huge array of sporting facilities and events – and of course an abundance of shopping malls.
Shopping is a cultural attraction in itself in Bahrain with luxury-end boutiques merging with traditional gold and craft sellers in the main city of Manama, and a number of purpose built shopping malls have been constructed in recent years attracting the shopaholic tourist in search of tax free goodies and beautiful local jewellery.
All things considered, Bahrain offers the perfect mix of the mystic and traditional East with the open and commercial West. As a result, the developments in the real estate sector relating to foreign freehold ownership of land and property in particular have resulted in an intensification of a keen interest in Bahrain from individual and corporate real estate investors the world over.