Real estate valuation in Bahrain has evolved considerably over the recent years following the implementation of Bahrain Valuation Standards (BVS) by the Real Estate Regulatory Authority (RERA); BVS fully adopts International Valuation Standards (IVS), which aims to increase confidence, trust & transparency through applying general principles that enable stakeholders to receive transparent information, reduce uncertainty and make informed decisions using a common language and practice. Clear procedures will undoubtedly increase confidence and positively impact the real estate and economic market locally and globally.
Traditionally, real estate valuation in Bahrain was conducted on an informal basis that relied on subjective judgment instead of verifiable information, more commonly known as land & construction value. Although this method is considered a quick, simple & logical cross-check of potential property value, it could be far from reality as the cost of a property does not necessarily reflect its worth or value. Using appropriate bases of values and valuation approaches as per BVS and IVS standards for different property types based on the nature of the property and available information and inputs depending on the nature of the property, such as comparable transactional information or technical analysis of ROI, enables valuers to achieve a higher degree of accuracy when determining the market, investment, or fair value of a given property.
Additionally, in the past, valuations could be conducted by any real estate professional. In contrast, nowadays, with RERA’s continued efforts to regulate the real estate market within the Kingdom, property valuations can only be conducted by licensed individuals or organizations that have the relevant knowledge, experience, and expertise as well as a valuation license that can only be obtained once achieving the appropriate qualifications and completing the respective courses giving the valuer an added level of credibility as well reducing bias and eliminating conflict of interest. Valuers can apply and progress through four license classes based on their qualifications. What distinguishes these four licenses is the limitations on permissible property types, valuation methods, and value caps, with class A license being the highest in which the valuer can conduct valuations for unrestricted property types and using all valuation methods with unrestricted monetary value caps.
In line with RERA’s mission to provide a solid, safe, transparent, and sustainable regulatory environment for the real estate sector that encourages investment and protects the rights of stakeholders, RERA has launched Aqari – a real estate data bank platform providing a national trustworthy source of information which allows valuers as well as other stakeholder to have access to accurate, credible, and updated real estate information. Such initiatives and tangible efforts contribute to the enhancement of the professional development of the real estate industry as well as further solidify the path towards a sustainable and promising real sector.
Ali Adnan Mahmood
Deputy Managing Director
Carlton Real Estate
