Real Estate Market in Bahrain: Bahrain has one of the most open and liberalized real estate markets in the region in terms of services and property ownership.
A series of sweeping reforms by industry regulators have been welcomed by most stakeholders and are expected to help ease speculation, improve consumer safety and maintain market stability in the coming years, thereby There will be long-term expansion.
Foreign ownership
The Commercial Companies Law was amended in July 2016 to allow 100% ownership of businesses in various sectors. Under the reforms, foreigners may have full ownership of businesses in services including residence, food, administrative services, arts, recreation, health, social work, information and communication, manufacturing, mining and quarrying, water supply, and real estate. The cabinet said in a statement, “Changes were made to accelerate growth, generate gainful employment for citizens and attract them for investment in various sectors.”
What’s more, foreigners are allowed 100% ownership of residential and commercial buildings of 10 or more stories in North Sanabis and Ahmed Al Fatta, Hurra, Bu Ghazal, SIF, and Diplomatic Area north of Manama. They are allowed full ownership in the tourist areas of Durat Al Bahrain Bay, Dunant Howard, and Amawaz Island.
Investment confidence
Under the current rules, a REIT’s dividend payment should be at least 90% of its actual income. The value of the REIT’s net assets must be derived from the rental business of the property, which includes at least two properties that have a minimum value of $ 20m, and the Real Estate Market in Bahrain and development of property cannot exceed 20% of the net asset value of the REIT. REIT offerings are currently limited as there is only one – Eskan Bank Realty Income Trust – listed on BHB.
Regulatory reforms
The agency has issued two laws, 15 regulations, and three circulars since its inception, and introduced reforms in areas including broker and sales agent licensing, off-plan sales, project licensing, Escrow account, property management, fees, and registers for brokers and developers.
This not only produced RERA, but also led to off-plan sales, or projects in which units are sold to buyers before they are sold. The law introduced a consumer protection mechanism for off-plan projects and required that all off-plan developers be registered with the authority.
The developers were given a grace period of six months to comply with the law, which came into force on September 1, 2018. According to RERA, the brokers’ response to the new law was “highly positive”, with more than 98%. Developers licensed. As of August 2018.
In July 2019, RERA raised licensing requirements for real estate valuers, directing them to participate in the authority’s Sustainable Development Program each year to qualify and renew their licenses. As part of the evaluation reform process, RERA will introduce a new classification model, which will enable licensed professionals to identify multiple monetary bands and characteristics within an evaluation base based on experience, qualifications, qualifications, and expertise. The reform was developed in partnership with the Royal Institution of Chartered Surveyors and the International Valuation Standards Council, which brings Bahrain in line with international best practices and sustainability.
Overview about Real Estate Market in Bahrain
Real estate in Bahrain continues flexible to macroeconomic challenges, having a positive – sub-pressure – growth trajectory in recent years as rental and ownership rates in the residential and commercial and hospital sectors have decreased. Although developers have struggled with continued Overspeed and weak demand – particularly for luxury residential space – low property prices have created new opportunities for businesses in the state, where office space is significantly higher in Abu Dhabi and Dubai. is more expensive.
The Ministry of Housing (MoH) is one of the main institutions responsible for the development of new housing in the state. To ensure sustainable long-term growth, the authorities implemented several reforms, including the creation of a new regulatory body for the industry. In 2017 the Real Estate Regulatory Authority (RERA) was established through a royal decree. The authority is in the process of developing a real estate policy in conjunction with public and private stakeholders, which will be supported by five-year strategies with an emphasis on consumer protection and improvement of services. A key goal for RERA is to improve clarity for investors, and for this, the authority is currently working to develop new mandates to clearly define the responsibilities of owners’ associations for shared assets and services is.
Bahrain Real Estate Investment Company (Edma) is the real estate investment arm of Mumlakat, the country’s sovereign wealth fund.
Property Purchase Process in Bahrain
Recent legislation in Bahrain now permits the ownership of a real real estate by foreigners. Legislative Decree Number 40 of 1999 allows the ownership of the land of Bahrain by citizens of the Gulf Country Council (Saudi Arabia, Oman, Kuwait, UAE, and Qatar). Legislative Decree No. 2 of 2001 states that non-Bahrain, whether a natural or corporate person, can own land in Bahrain. This law includes all non-Bahrain, GCC national, or otherwise. It was fully authorized in 2003. The land is also available for lease from the government.
However, Bahrain has restrictions related to foreign ownership. There are designated areas that the government has designated for foreign ownership. The following are residential and commercial areas:
- Ahmed Al-Fateh District
- Hur district
- Bu Ghazal District
- Seef District
- District of North Manama including Diplomatic Area
Foreign purchase of residential properties is also available in:
- Durrat Al Bahrain
- Amawaz Islands
- Danat hardware
Non-GCC emigrants can secure a permanent residence permit that allows them to provide real estate property, but the permit is finished in the event of the sale of the property.
Freshly, however, to control rising property prices, there is a bill approved by the Chamber of Deputies preventing foreign nationals from acquiring more than 5,000 square meters (sqm) of land in Bahrain.
It is advisable to hire the services of a lawyer during the entire procurement process.
Potential buyers can hire a real estate agent to search for properties in Bahrain. The buyer or his agent should contact the seller when he buys a property he wants to buy. After negotiation, the buyer will sign a reservation agreement where the seller does not agree to sell the property to anyone else.
Once the buyer signs a sales agreement with the seller, they will need to make a down payment. The payment plan and schedule of the remaining payments should be established in the sales agreement. After the property is paid in full, the seller assigns the title deed.
The sales agreement must be notarized in a law court, usually processed within one business day. The notarization fee for four notarized copies of the sales agreement is around BHD15 (the US $ 40).
Register the property in the buyer’s name with the Survey and Land Registration Bureau of Bahrain. To register property, you must provide ownership of the previous property with proper identification, sale agreement, and title.
The buyer or new owner is liable to pay the registration fee. If the property registers within 60 days of the execution of the sale agreement, the buyer is allowed a 10% reduction on the registration fee. Property registration takes approximately 31 days.
Know everything about Real Estate Market in Bahrain at https://www.rera.gov.bh/en/
