Hussain Alsebea
Managing Director
Beyond Best

Globally, markets undergo a constant cycle of changes with challenges to overcome and solutions to brainstorm. The same can be said for Bahrain’s rental market which is currently facing its own challenges and solutions are needed for them. This article covers three important challenges which are: Covid-19, EWA bill rise, and the resettling of tenants in Saudi Arabia. A couple of solutions will also be mentioned along the way.

The global pandemic (also known as Covid-19) is a great challenge faced by real estate companies. With jobs being made redundant causing tenants to lose their jobs or having their salaries cut out, landlords are receiving less demand on rental services as tenants try to save their earnings more during the pandemic. With tenants cutting their costs, they have also started to shift to lower rent properties. This translates to significantly lower revenues for rental companies and therefore less profits for them to earn. Covid-19 in addition caused restrictions on traveling, thus the number of tenants arriving to Bahrain became very low meaning even less revenue for rental companies. The global pandemic overall lead to a noticeable decline of revenues and activities from the rental companies in Bahrain.

The rise in electricity and water bills in Bahrain is another challenge that rental companies are facing. Started in 2015, the rise in bills have now reached to more than 500 BD monthly which can equal or even exceed the rent of some properties in the rental market. Therefore, tenants have started to resettle in other countries with their families, especially in other gulf countries like Saudi Arabia just to avoid paying the high EWA bills. Some tenants opted shifting from large to small villas or switching from a villa to an apartment. Others went further out in order to cope with the bill rise by sharing their properties with others, having split acs instead of central acs, or having small gardens for less water bills. Recently, new trend arose where tenants prefer rent with inclusive water and electricity even with a limit on them. Landlords of rental companies would therefore attract more tenants if they offered more properties with inclusive rent.

Yet another rising challenge faced by Bahrain’s rental market is tenants working in Saudi Arabia shifting their families to live there. The reason for this change is due to the alteration in Saudi Arabia’s vision where there has been an increased encouragement on previously banned activities such as cinemas, women having driver’s licenses, theme parks and other activities. Before, tenants working in Saudi Arabia would bring their families to live in Bahrain but with the continuous introduction of new activities in Saudi Arabia, more and more tenants are resettling their families there instead. This challenge has just recently surfaced with only a subtle lose of tenants to Saudi Arabia rental companies. Still, landlords in Bahraini rental companies are worried about losing their tenants to Saudi Arabia so a solution must be made in order to convince and attract tenants to continue letting their families stay in Bahrain.

These three main challenges faced by the Bahrain rental market can be solved with various methods and actions. One solution can be for landlords to consider these challenges then offer a more budget-friendly rental price for tenants as well as higher-quality facilities. Another solution is for the government to lower the electricity and water bills in order to encourage tenants to continue living in Bahrain without them having their spending cut to cope with the high bills. With continuous high efforts and a strong drive, rental companies in the Bahrain rental market will surely be able to overcome even the most difficult challenges.

This article was published as part of the eighth edition of Property Finder Bahrain’s Trends Report.