Bahrain wants to give further boost to burgeoning real estate market
The government of Bahrain has enacted various laws to give further boost to the burgeoning real estate market in the country. Laws have been passed allowing nationals from other GCC countries to own property in Bahrain.
Another decree was passed recently, allowing foreigners and foreign investors 100% ownership of land in pre-determined areas. Moreover, the positive reforms being made by the government of Bahrain towards developing a strong economy and infrastructure have attracted many foreign and GCC investors to the island's property market. And on the back of the tourism boom, resorts development is a sunshine sector, and is also creating other opportunities like the development of access roads.
In 2004, the real estate and construction sector witnessed the highest growth recorded for last three years. The real estate and construction contribution to GDP has been increasing in terms of absolute value. The contribution to GDP reached BD527.7mn in 2004 as compared to BD459.6mn in 2003, reporting an increase of 14.8%. Going forward and looking at the developments in the building material industry (such as cement and sand companies), in addition to the projects in the pipeline, it is quite evident that we would be witnessing some outstanding numbers for the coming years.
Bahrain witnessed frantic real estate and construction activities in recent years. Due to the exceptional growth in the year 2003, the commercial licenses to the construction sector had declined by 64.4% in 2004 to 222 as compared to 624 in 2003. However, this might not be the case when talking about 2005, as half way through we have witnessed a total of 397 commercial licenses issued, which has already surpassed the 2004 level of 222.
As mentioned earlier, the construction and real estate sector is booming, which can be further witnessed from the sector increasing bank borrowing. In recent years, the commercial bank lending to the real estate and construction sector has been hovering around the 14-16% of the total business lending by the commercial banks in Bahrain, and whereas in 2004 its share was 20.8% to the total business lending portfolio of the commercial banks. (By Global Investment House)