Bahrain: Real-Estate Market Sluggish Recovery

Latest statistics from the EDB show that the loans to the real-estate sector are up by 7.7% as of November 2012, which indicates a renewal of activity in the real estate sector.

Robert Lee, CEO of Bahrain Bay talks about the situation in the real-estate market. He says; “There’s a saying in real estate – you never take the same road twice. I drive around on weekends and see different signs and images. The first thing I see is the cranes that are moving around and the construction activity, the very basics, the holdings that are coming up. You can see that the frequency and locations are increasing weekly. Is it a massive increase? No, but you can see there is something new going on.”

With the slowdown in the Eurozone a major issue is that European banks have been withdrawing liquidity from the market, Lee sees financing as a major issue; ” Financing has been and I think will continue to be an issue when it comes to the real estate sector because the banking industry is overburdened by what is called, and I think it comes from the US side, toxic real estate assets….So unless you’re doing a development that requires a high level of equity that you already have, we expect the financing to become one of the biggest issues in 2013.” 

“The real estate industry is simple. You try to go where the money is and right now the money is in social and affordable housing. So many people in the development industry are working with the Ministry of Housing and Ministry of Works and the various government entities that are committed to provide social housing to actually get into the social housing program. That probably will become the backbone of the construction and development industry for 2013 and maybe for the next three or four years.” concludes Lee.