what may come…
1 Rental prices have stayed the same
In the beginning of this year, the average rents in most areas on the island stayed the same for the second consecutive quarter, taking the annual rate of change down to 4.4 percent, according to real estate firm Cluttons’ Spring 2016 Property Market Outlook Report. That is except for Juffair, where rents rose from BD700 to BD800 per month last year (but haven’t changed since). There was a stark difference in 2015, when we last checked in with the property market, as we were reporting that rental costs were increasing gradually as more and more investors flowed into the country.
Due to the oil slump, across the region there seems to have been a growing number of redundancies and so this may cause pressure on landlords to lower rental prices. Tom Carter, Cluttons’ Associate Director – Head of Agency, says of tenancy requirements and budgets, “It is difficult to give an exact percentage [for the drop] but with oil prices dipping [at the time of writing] we expect this to have an effect in the coming months.” As this happens, and tenants start to renew their lease contracts, “it is likely that there will be an increased amount of rent negotiations at renewal as tenants move to rein in costs,” Cluttons reports.
3 Amwaj sees the most significant drop in annual rents
There’s been no change to rents on expat haven and island living hotspot Amwaj Islands since the last quarter, but this does mean an annual change of -2.3 percent, reports Cluttons. On average, the rents in this area have been stuck at not much more than BD700 per month. That’s the most significant drop across Bahrain’s residential areas, followed closely by the Seef District.
4 It’s still the most popular area though
Amwaj Islands is still the most searched-for location on Bahrain Property World even if it has seen a slight fall in popularity since last year. Villas here, for instance, cost between BD1,200 and BD1,500 per month for three- and four-bedroom homes in comparison to Saar, another popular spot, where these kinds of villas go for between BD950 and BD1,200 per month.
5 And people are looking for apartments
Alongside the drop in searches for property in Amwaj, there has also been a decrease in people looking for villas altogether. Bahrain Property World reported a fall of five percent between January 2015 and January 2016, reflecting renters’ tightening budgets.
6 Mahooz is getting more popular
“It is worth noting that the return of expat families to more central areas began some 18 months ago,” states the Cluttons’ report, “but this trend is now gathering momentum.” These areas include places such as Mahooz, in the Capital Governorate, following the increase in high-quality buildings such as Cebarco Tower and Segaya Views, Carter tells us.
7 When renting, expect more inclusive deals and utility caps
Utility subsides are gradually being removed and the report states there isn’t much clarity on whether the costs are the tenants’ or landlords’ responsibility, but a set monthly allowance (aka a “cap”) is becoming the norm. “We expect to see more inclusive rental with an electricity cap,” says Carter. “For residential apartments BD20 per month or BD240 per year as a maximum cap seem to be the trend.”
8 If you’re thinking about renting, this is what you need to know…
Firstly, you need a residence permit and a national ID, then we advise you find a reputable realtor. Decide your budget and whether you want unfurnished, semi-furnished (white goods included) or fully furnished accommodation, then choose your location. Remember, when a landlord says “exclusive”, this means you will foot all the utility bills, while “inclusive” means they’re included in the package (although nowadays utility bills might have a cap). You also need to find out how much rent they’ll need in advance (two or three months is common).
9 Carefully consider your tenancy agreement
It goes without saying that this is one of the most important documents you’ll sign while you’re in Bahrain and so you should make sure you’ve read it carefully before signing. “There are no hidden costs, it’s all in the contract if read carefully,” says Monsi Rabah, propertyfinder.bh’s Regional Manager for Qatar and Bahrain. “When discussing with your agent you should ask this question as he will give you all the details on the costs involved including his commission.” Also check for a Diplomatic Cause, which protects expatriates when they unexpectedly need to leave the country and opt out of the lease agreement.
10 As for the best areas to live right now? It’s a tough question…
Clearly, choosing a house, which will become a home, is a very subjective thing and very much depends on what features are important to you. This includes proximity to work or your kid’s school, number of bedrooms, space and facilities such as a swimming pool or gym. “If you like staying in your home over the weekend or walking/jogging, Amwaj is a great place,” says Carter. “If you like the hustle and bustle of a city then Juffair will suit you. If you want to be in a compound or close to the Rugby Club then Janabiya/Saar will work for you.
“The bottom line is that with as much supply as there is in the market, there are deals to be had in every area.”
11 If you’re thinking about buying, this is what you need to know…
Expatriates and locals can buy property in Bahrain’s freehold areas, although non-nationals are limited to certain areas, the law states. These areas include the major attractive residential developments such as Amwaj Islands, Durrat Al Bahrain and Reef Island in Seef, as well as in Juffair. If you’re here for the long haul, it makes sense to invest rather than to rent, Carter tells us.
12 The laws protect buyers
Previously, there were cases when investors bought off-plan before developments were finished and then had long waits until any progress was made, never mind until they could move in. But the laws have changed and buyers can feel more secure. Carter outlined the benefits of the law to us last year. “This law requires all developers to liaise directly with the relevant authorities before the sales launch of developments, ensuring complete investments, escrow accounts and firm plans for project completion.” When buying, he advises to use either cash savings or to secure a mortgage from any of the banks here offering flexible options with affordable interest rates.
13 Juffair is a good place to buy
Home to many towering apartment blocks, hotels and nightlife spots, as well as the United States Navy base, Juffair is already a popular place for expats and is the only area to see an increase in rents. But Carter also says it’s a good place to look if you’re looking to invest in property right now. “Juffair is always a solid investment with yields of seven percent and above being quite easy to find,” he says. “One-bedroom apartments are always in demand and give generally solid returns. Amwaj and Reef Island [in Seef] offer similar benefits.”
14 And it seems there will be plenty more to invest in soon
Over the past year a slate of beautiful residential and leisure developments have been announced or have made progress, while recent changes in the law have reportedly boosted investors’ confidence. These include Marassi Al Bahrain by Abu Dhabi’s Eagle Hills in Diyar Al Muharraq, where a beach and sales office have opened, as well as Bin Faqeeh’s Layan in Durrat Al Bahrain, which was announced earlier this year. There’s the Bahrain Marina project on Al Fateh Corniche, which officially moved into phase two back in January, and work-in-progress Essence of Dilmunia and newly launched Hanging Gardens of Dilmunia by Ahmed AlQaed Group. If all goes to plan, the face of Bahrain’s property market, in residential, leisure and retail, will change completely.
15 What they expect this year
Overall, alongside a decrease in budgets, Cluttons reports it expects average rents will be likely decline to by up to five percent this year, “with some areas expected to remain stable”.
Average rents in BD*
The expected starting rent per month at Segaya Views in Mahooz. At Cebarco Tower they stand between BD650 and BD1,500 per month.
This is the amount you can expect to pay per month for an apartment in the Seef District, a popular area near offices and malls.
Overall, this is the average monthly rent on apartments across Bahrain as measured in the first quarter this year.
The average monthly rent on villas across the island as per figures reported in the first quarter of 2016.