WHY BUY IN BAHRAIN?

Information for Investors

Bahrain has a fast developing real estate sector that currently offers inimitable 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, the country’s infrastructure is improving and the attraction and appeal of this Persian Gulf island nation is intensifying, creating sustained interest in the property sector.

The five main economic areas that the Bahraini 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 in the real estate sector is wholly secondary to the development of these five key areas and is being brought about by an increase in the numbers of international executives and employees who are relocating to Bahrain to establish business enterprises or to take up employment and residence.

The demand for property for sale in Bahrain by overseas buyers was so intense that it led to a change in the constitution in 2001 to allow for foreign freehold ownership of real estate in commercial and residential high rise buildings as well as in areas designated for tourism, banking, financial, health and educational training.

The occupancy demand for quality accommodation in Bahrain is as intense as the investor demand and as a result a large amount of investment is being poured into improving infrastructure and services and 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 being charged are especially attractive.

As developments are sold out and international interest in Bahrain grows, 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.

Essentially it has been possible for foreign investors to purchase real estate in Bahrain since 2001 when a royal declaration was issued to that effect.

The declaration was fully endorsed and sanctioned in 2003 and it states that foreign buyers are permitted to buy certain types of property in certain areas of Bahrain.

Local interpretation of the rules relating to foreign freehold ownership of property in Bahrain nowadays see 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 freeholdproperty 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 in the region of an incredible 400%.

Foreign Ownership - For Information Check Out : www.slrb.gov.bh 

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.  Foreign investors wishing to get in on the booming Bahraini property market are buying into these developments.

In terms of the property buying process in Bahrain it proceeds in a similar way to the majority of buying processes worldwide.  Investors are advised to seek independent legal assistance throughout the entire purchase process of course and the legal property ownership rights in Bahrain are sophisticated and well developed meaning the purchaser is protected once permission to purchase has been granted and deeds of ownership transferred into the investor’s name.

Those purchasing pre-construction are 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 the purchaser 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.

General guide to the country of Bahrain for potential property buyers.

An island nation in the Persian Gulf of intense strategic importance, Bahrain is also an interesting emerging real estate economy with incredible opportunity for property investors and developers alike - this is a general country guide to Bahrain for property buyers.

The economy of Bahrain which was once driven by oil has quickly been diversified; the country’s government understood and reacted to the requirement for economic change very swiftly.  It resulted from dwindling oil supplies and nowadays the country has a successful petroleum processing and banking based economy and an emerging real estate economy.
 
The diversification into the luxury real estate marketplace is really just emerging – as many offshore island developments are beginning to take shape.

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 and a constitutional monarchy, it has a prime minister and women were granted the right to vote and stand for election back in 2002.  Depending on the area of the country you visit or 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 a fantastic and lively pace of life.

The multinational expatriate communities have access to English language TV and don’t struggle with the country’s official language which is Arabic because English is very widely spoken and understood and is of course the international business language used day to day in the office in Bahrain. 

The quality of life achievable for Westerners is first class, they have 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 mingling with traditional gold and craft sellers in the main city of Manama, and a number of purpose built shopping malls have been built in recent years attracting the shopaholic tourist in search of tax free goodies and beautiful local jewellery.

All in all Bahrain offers the perfect mix of mystic and traditional East meets open and modern 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 an already sharp and keen interest in Bahrain from individual and corporate real estate investors from around the world