How the implementation of laws will contribute to the development of real estate in Bahrain –
by Mohamed Aljawad, Domains Real Estate
There is no doubt that the local real estate market has been, and remains, one of the best in the Gulf and regional markets, and one of the most secure and stable. This is especially true in terms of its cohesion during the previous economic crisis and how fast it recovered and matured, which has led to an increased level of confidence from investors in the market on both GCC and international levels.
Some of the most prominent issues faced by the Bahraini real estate market are:
– Contribution of the real estate sector to the gross domestic product:
A real estate market in any country is one of the main contributors of its economy. I believe that reform and regulation of the sector will contribute highly to the productivity of this sector and its contribution in increasing the GDP.
– Advanced laws for Owner Unions:
The new laws governing the real estate sector stipulates that laws should facilitate the process of the market, and make it easier. The establishment of Owner Unions has always been more difficult for workers who are in the sale market. With the new law, the establishment of the Owner Union is created by signing the contract for the sale of the first unit of the project, as opposed to previously, where it was limited to selling a certain percentage of the total units available.
– Emerging real estate companies need attention:
It is important to pay attention to emerging real estate companies and provide them with the necessary means of support. One of the objectives of RERA is to prepare these emerging companies, especially with the existence of new systems that may be stricter at times. It is certain that the support of these small brokerages will create a healthy sense of competition in the market.
– The lack of knowledge about prices and the exploitation of intermediaries:
Over the years, and in the absence of an official organisation that regulates and follows up on the information on the real estate market, some intermediaries, unfortunately, exploited the local market. The lack of transparency in the market affected customers and led to a loss in investment. In some cases, many employees and clients rely on RERA as the responsible platform for providing information for the end user, investor and intermediaries, as well as all others in the sector.
– The reliance of the market on traditional marketing tools and methods:
Some real estate professionals still rely on marketing their products and real estate services through outdated marketing methods and tools, forgetting that the real estate market is now more mature, and that consumers need to showcase and provide information in modern methods. Today, the market is completely different from the market 10 years ago.
– Development of the Mazaya Program to finance housing applications
The Mazaya program is one of the most important financing programs that is affecting the housing sector in the local real estate market. The Minister of Housing mentioned that the number of beneficiaries of the Mazaya program starting in 2018 was an estimated 2,600 people, with the number projected to increase. There are plans in place to develop the program to include those under the age of 50 years instead of 34 years and include those with an income of under 1500 BHD per month instead of 1200 BHD. The new strategy will also include applications for land plots as opposed to housing units only, which will reduce the wait time for housing services.
– Expectations for the real estate market over the next two years:
Growth in the real estate sector is expected to continue over the next two years, especially with the accessibility to neighbouring countries in the GCC. Bahrain has always been positively affected with any regional developments, now more than ever, as more investment is taking place throughout the GCC market.
This article was first published in Trends Vol. 2
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