Savills: Bahrain Property Market 2024 Trends and Insights

Savills, a leading global real estate services provider, has released its latest report on Bahrain’s property market for the fourth quarter of 2024. The analysis highlights key market trends, emerging opportunities, and challenges that define the Kingdom’s real estate sector.

Economic Resilience and Growth

Bahrain’s economy has demonstrated remarkable resilience, achieving a GDP growth rate of 2.1% in 2024. This expansion is largely attributed to the strength of non-oil sectors, particularly manufacturing and financial services, which collectively contribute 37% to the country’s GDP. With the government actively pursuing economic diversification, upcoming projects such as new industrial zones and a greenfield airport are expected to attract both domestic and foreign investment, laying a strong foundation for sustained economic and real estate market growth.

Real Estate Market Performance

The Bahraini property market has gained momentum due to favourable demographic trends, increased affordability, and government-backed initiatives. The introduction of long-term residency options, including the Golden Visa, has played a pivotal role in enhancing investor confidence. This has particularly appealed to high-net-worth individuals, resulting in a surge in real estate sales. A growing number of expatriates are opting for homeownership over renting, further driving demand in the residential sector.

Prime Property Hotspots and Development Trends

Key locations such as Diyar Al Muharraq, Manama Seafront, and Juffair continue to be top choices for real estate transactions, recording consistent year-on-year growth. To meet the rising demand, developers are increasingly launching mixed-use projects that combine residential, commercial, retail, and recreational elements, offering comprehensive lifestyle solutions to investors and buyers. Additionally, the Urban Planning and Development Authority’s decision to expand residential-use zones by 208,000 square meters reflects a proactive approach to addressing housing needs.

Residential Market Trends

Bahrain’s residential property segment has remained stable, with high-end apartment prices increasing by 1.4% year-on-year, while villa prices have remained unchanged. The demand for modern, well-equipped properties continues to strengthen, particularly in the rental market, where rates have surged by 23% across the country in 2024. The Capital Governorate remains a dominant player, accounting for 48% of all rental transactions, maintaining its historical market leadership.

Commercial Office and Retail Sector Dynamics

The office real estate market faced challenges in 2024, with demand stagnating and rental rates showing minimal growth. Despite the introduction of new developments such as SayaCorp Tower, the sector remains under pressure. The anticipated completion of Future Generation Tower in 2025 may lead to further market shifts. On the retail front, however, signs of recovery are evident. The expansion of luxury brands, including Rolex and Giorgio Armani, into Marassi Galleria has significantly boosted foot traffic, contributing to a renewed sense of optimism in the retail space.

Industrial Sector Growth

Bahrain’s industrial sector continues to thrive, with manufacturing playing a key role in driving warehouse demand. Rental rates for larger warehouse units have grown by 2.1% year-on-year, whereas smaller unit prices have remained steady. The industrial real estate segment remains a crucial component of Bahrain’s broader economic diversification strategy, with further infrastructure investments expected to sustain long-term demand for industrial space.

Hashim Kadhem, Head of Professional Services, Bahrain, Savills Middle East, commented: “The Bahraini property market continues to show growth despite global economic uncertainties. With new infrastructure projects and government initiatives in place, Bahrain remains an attractive destination for both investors and residents. The growth in residential, retail, and industrial sectors highlights the Kingdom’s evolving real estate landscape, and we expect this momentum to continue well into 2025.”

In conclusion, Bahrain’s real estate sector is benefiting from economic resilience, government initiatives, and growing investor interest. While certain challenges persist in the commercial office segment, the overall outlook remains positive, particularly in the residential and industrial markets. As the Kingdom continues its economic transformation, its property market is expected to evolve, offering new opportunities for investors and developers alike.