Staff Report
Dubai, UAE
Bahrain’s economy flourished in 2024, marking a growth of 2.1 percent in its gross domestic product (GDP) that was largely driven by the non-oil sectors. The real estate industry contributed to this growth, with residential sector noting greater demand among buyers. In order to meet Bahrain’s housing needs, the Urban Planning and Development Authority announced the expansion of residential-use area by 208,000 square metres. Other sectors such as retail and industrial spaces performed well, whereas office spaces recorded limited demand.
Savills, a global real estate services provider, revealed in its latest report that the Kingdom’s economy was significantly buoyed by manufacturing and financial services, which together accounted for 37 percent of the total GDP. Bahrain is now focusing on economic diversification by building new industrial zones and developing a greenfield airport. These initiatives are expected to attract both local and foreign investment, create job opportunities, and enhance the industrial sector’s contribution to GDP and exports.
According to the preliminary results of the Foreign Direct Investment (FDI) survey conducted by the Information and eGovernment Authority in collaboration with the Central Bank of Bahrain, inward investments into the Kingdom of Bahrain continued to rise in the first three quarters of 2024. Investments grew by 37 percent year-on-year (Y-o-Y) reaching a total stock of BHD 49.1 billion (Dh478.5 billion), up from BHD 45.9 billion (Dh447 billion) during the same period in 2023. The Financial and Insurance Services sector made the largest contribution to inward FDI stock, followed by the manufacturing sector
In the real estate market, the introduction of long-term residency options, such as the Golden Visa, has been particularly instrumental in boosting investor confidence, especially among high-net-worth individuals keen to explore opportunities in the region. This has led to an increase in sales activity, particularly in the residential market, as more expatriates opt to purchase properties rather than rent, further stimulating demand.
Locations such as Diyar Al Muharraq, Manama Seafront, and Juffair continue to be popular hotspots for property transactions, maintaining strong performance year on year. In response to growing demand, developers have increasingly launched projects that integrate residential, commercial, retail, and recreational spaces, providing buyers and investors with more comprehensive living environments.
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.”
Residential prices in Bahrain have shown steady growth, with high-end apartments seeing a year-on-year price increase of 1.4 percent, while villa prices have remained stable. This indicates a strengthening of demand for premium properties, as more consumers seek modern developments equipped with high-end amenities. The increasing popularity of large, well-designed homes has been particularly evident in the rental market, where rental values rose by 23 percent across the Kingdom in 2024. In particular, the Capital Governorate accounted for 48 percent of rental transactions, maintaining historical trends.
The commercial office market, however, faced some challenges throughout 2024, with limited demand and relatively flat rental growth despite new developments such as SayaCorp Tower entering the market. The Future Generation Tower, scheduled for completion in 2025, may contribute to further market adjustments.
On the other hand, Bahrain’s retail sector is showing signs of recovery, as luxury brands like Rolex and Giorgio Armani have opened new stores in Marassi Galleria, driving foot traffic and demand in the retail space.
In the industrial sector, Bahrain’s focus on manufacturing continues to drive demand for warehouse space. Larger warehouse spaces have seen a slight increase in rental rates, with a 2.1 percent year-on-year growth, while rates for smaller units have remained stable. The industrial market remains integral to Bahrain’s economic diversification strategy, and further investments in infrastructure are expected to continue supporting demand for industrial space.
Ends
Also read: Edamah and SHG launch Azure Beach Bahrain
