Unrest in Bahrain is eviscerating real estate values across the country as prospective investors look to safer markets to purchase homes and commercial property. The market fell 25% in the first half of 2011 amid protests that ended in dozens killed and hundreds wounded, and a declaration of martial law that lasted for months. The uprising forced many well-heeled locals to relocate out of central areas and placed scores of wealthy expatriates out of the luxury market. For more on this continue reading the following article from Property Wire.
Rental rates in Bahrain slumped by a quarter in the first half of 2011 as the political unrest deterred foreign investors and companies, according to the latest report from international property consultants Knight Frank.
The average rental rate was BD1,200 ($3,183), a decline of 25% on the same period a year earlier, the report said. The decline was reflected among sale values, with average pricing for apartments in the Gulf kingdom at BD790 ($2,095) per square meter during the same six month period.
Villa rates fell to BD625 ($1.658) per square meter as social unrest also squeezed Bahrain’s fledgling luxury property sales, with bigger spenders moving choosing to invest in safe haven markets elsewhere.
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‘The luxury housing market was relatively small in terms of demand even before the political unrest, but it has understandably had an effect, as those investors who were showing modest interest have now looked to more secure markets in which to place their money,’ said Jim Lynn, head of research in Knight Frank’s Bahrain office.
Protesters took to the kingdom’s streets in February to demand more representation and access to better jobs and benefits. At least 30 people were killed, hundreds wounded and more than 1,000 detained in a government crackdown backed by troops brought in from Saudi Arabia and the United Arab Emirates. Martial law was declared at the height of the unrest, but was lifted in July.
In April, a report by property consultancy CB Richard Ellis found expatriate families in Bahrain were relocating from central areas to quieter neighbourhoods, in a bid to escape future unrest.
Regions that were among those most affect by the uprisings include Saar and Budaiya in the north west, which were previously popular destinations for upper-income migrant families.
‘Many expatriates, especially those with families, have found the recent problems, which were very audible in this area, to be deeply troubling, and as a result there is likely to be some movement to quieter locations not so visibly or audibly affected by political differences,’ the report said.
Office rents in the kingdom have also seen a sharp decline in value. Prime rates were down by 11% in the first half of 2011, reaching a monthly rate of BD9 ($23.86) per square meter, similar to rents seen in the pre-boom years of 2005 to 2006.
This article was republished with permission from Property Wire.