Role of the Real Estate Sector in the Regional Economy

Jun 03, 2021
Role of the Real Estate Sector in the Regional Economy
Role of the Real Estate Sector in the Regional Economy
Jun 03, 2021

Some may wonder if the real estate sector contributes to the local and regional economy, and if yes, how does this process take place.

The answer is yes! In the Kingdom of Bahrain, we find that in 2019, the real estate sector contributed more than 5% and is one of the top 10 non-oil sectors that contribute effectively to the GDP. Since then and until now, investments in the real estate market have had a steady rise and rapid expansion which has positively affected the national economy.

This is largely due to the Kingdom of Bahrain’s provision of a wide range of investment opportunities and flexible laws to spur the growth of the local economy, such as allowing 100% foreign ownership, and according to the Economic Development Board, “The rental market in Bahrain provides a stable income. The total return on rentals is one of the highest rates in the GCC, and a major reason for the interest in the freehold market in the Kingdom, in addition to the fact that sale and rental of real estate and property are exempt from VAT.”

There are other factors like the strong regulatory system that attracts foreign real estate investments in commercial and residential projects and the presence of the Real Estate Regulatory Authority (RERA) which ensures that the real estate market in the Kingdom of Bahrain operates according to accurate and high standards.

There are many investors from the Gulf countries, such as KSA, Kuwait, and Oman. Thus, Real Estate Investment Trusts (REITs) can find great developmental opportunities in the Kingdom of Bahrain.

In conclusion, we find that the real estate sector is a vital factor in the GDP and one of the most sectors witnessing great momentum, as it attracts a significant number of foreign investments.

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