Regardless of its 5,000 year history, US associated Bahrain is an ‘emerging’ country and has been in a major state of transition since the prevailing king and previous amir of Bahrain Sheikh Hamad bin Isa Al Khalifa rose to power in 1999 and it’s vital that any financier inspecting the property market prospects in Bahrain for profit potential in 2007 and beyond understands the character of the development of the country before they consider committing to it.
While the existing period of transition now suggests that Bahrain has evolved into one of the most wealthy and interesting states in the Gulf area in which to live, work, invest and thrive, it’s quickly expanding economy and major political changes have created a base sense of destabilisation among certain camps of the local population.
While in general Bahrain’s property market prospects for 2007 are awfully positive indeed and this article covers the positive prospects for the market, it also details the essential issues that could enfeeble the near term attractiveness of the state’s property sector so that backers can make as informed a call as practical about market entry and investment commitment.
Since the prevailing king of Bahrain attained power his country has made incredible progresson the political front Bahrain is now associated with the likes of the United States and UK, it’s got a free trade agreement in place with America, it has open elections and in 2006 the 1st ever female parliamentarian in any Arab Gulf country got voted in into office in Bahrain. On the business front the king of Bahrain has been key to the transition of his country away from its commercial reliance on oil and going forward into 2007 and beyond, Bahrain has a robust economy with awfully positive annual GDP expansion rates.
The reason behind this is that Bahrain is found in a crucial strategic position in the Gulf and has taken it on itself to be the state offering least resistance to establishment firms requiring a physical presence in the area. As a consequence of fascinating legislation, clear business practices and a low / no tax policy, Bahrain has succeeded in tempting enormous numbers of global and firm companies to its shores who each need a base in the Gulf region and who each recruit enormous numbers of global expats who are now moving to live in Bahrain.
This resultant robust inward migration of pro immigrants demanding housing saw Bahrain being one of the first of the Gulf states to grant freehold property possession rights to foreigners. This means that now global voters and stockholders are getting swathes of property as it comes to the market and causing up property costs out of reach of the local population.
As well as this scenario supply of property particularly in the main commercial areas is in limited supply that has also led to a wild rental market too which further excludes many local voters obviously all this activity has made a sense of disappointment among local Bahraini voters and it is this disappointment that’s causing an undercurrent of disaffection. There’s another factor having an effect on the home market in Bahrain as well as Bahrain is joined by a twenty-five km causeway to neighbouring Saudi Arabia and yet is a far more liberalised and reasonable country, Westerners working in Saudi are also choosing to live in Bahrain and to commute across the King Fahd Causeway instead of live in Saudi Arabia. On the one hand all these factors mean that there’s powerful and inflating requirement for commercial and home property for sale and lease in Bahrain among an increasingly wealthy international community this indicates that in 2007 and beyond there’ll be an ideal environment in Bahrain for property speculators to exploit.
On the other hand however there’s mounting strain among those area folk who cannot continue to afford the rising property costs. While this strain goes principally ignored some are beginning to claim that Bahrain has moved too quickly in developing new areas of its economy and in permitting enterprise corporations to line up operations in the country. These multinationals have been charged with mostly employing expatriate staff in a place where, particularly among the Bahraini youth, there are important unemployment issues and also minimum wage issues.
