Bahrain's property market seen static in Q4: report

Property prices, rents and transactions in Bahrain's housing market were static in the third quarter, and are likely to remain so for the fourth quarter, CB Richard Ellis said on Monday.

"The end of summer and Ramadan should bring some vibrancy to the market but it remains to be seen whether Q4 will herald the return of significant levels of energy to the flagging market," the real estate services firm said in a report.

Property prices across the board have fallen by as much as 15 per cent year-on-year, the firm's senior director Mike Williams told Reuters.

Mortgage rates in the smallest Gulf Arab economy are prohibitive and will stunt the market until liquidity and appetite for mortgage business returns to the banking sector, the report said.

Villa compounds continue to see relatively high occupancy levels and rental rates have stabilised after two of three years of rapid rental rate increases, it said, adding the significant delivery pipeline of appartments may cause a demand-supply imbalance for some time.

"The return of job creation will be key to filling vacant units," it said. In October Williams told Reuters there will be some 60,000 residential units delivered to the market up to 2013, out of which 38,000 will be government-sponsored low-income housing units.

Meanwhile the rate of new lettings in the country's office market dropped sharply between the first and third quarters.

"Where previously medium and international sized corporates were seeking space predominantly in Seef District for a variety or reasons, they have been sitting on their hands during the summer months and enquiries have declined significantly."

Office rates fell by as much as 20 percent in 2009 with the greatest fall happening during the summer months and Ramadan, it said.

In September Dubai-based research firm Proleads said Bahrain's total construction sector projects are valued at more than $36 billion with 148 in construction or bidding and 54 cancelled or on hold.

The United Arab Emirates' construction sector has been hardest hit by the downturn in the Gulf Arab region, with more than 500 projects on hold or cancelled, it said.

Prices in Dubai's once-booming property sector have fallen by around 50 per cent since their peaks in the third quarter of 2008.