Real estate developers and consultants are sceptical of a law being planned by Bahrain to ban non-nationals, including GCC nationals, from owning residential properties in the country.
“The move is contrary to the developments launched in Bahrain,” said Roy O’Connor, director of Arenco Real Estate. Most developers in the UAE doubt whether the law will be implemented at all.
“We have launched projects and sold them. I don’t think it is likely to happen. It’s too late for them,” Imtiaz Panjwani, chairman, Pegasus Realty, told Emirates Business. According to a local media report, the Bahraini parliament is mulling a law for the purpose and it is aimed to check the “unreasonable hike” in real estate prices in Bahrain. However, GCC nationals who have inherited residential properties will be excluded from the new law.
The parliament’s financial affairs committee is likely to approve a draft law imposing curbs on non-Bahrainis’ realty trading activities.
However, the law will be implemented in stages, as non-Bahrainis can now buy no more than 5,000 square metres of land, or properties, with no right to sell the property for the first seven years. “A lot of foreigners have been investing in GCC markets. Most of the investments in Bahrain have come from Saudi Arabia. It will be difficult to implement such a law,” Panjwani said.
Pegasus Realty has launched the $250 million (Dh918m) Abraj Al Lulu project and will soon unveil a Dh400m project.
A growing population, rising expatriate workforce, growth in credit facilities and a foreign-friendly environment have been the key drivers of the real estate sector in Bahrain.
The residential sector has been witnessing a lot of speculative activity mainly by Kuwaiti and Saudi investors, with land prices appreciating by about three to four times, according to Global Investment House.
“There are many things reported, but nothing is implemented,” Roy said.
However, the Central Bank of Bahrain has said it wants to limit banks’ exposure to the real estate market and proposed capping the value of mortgages at 25 per cent of total loans.