This guide offers an overview of the Dilmunia's Real Estate market, insightful strategies for land sub-division, and an analysis of the potential returns and pricing trends. Whether you're a veteran investor or exploring new horizons, this guide is your key to unlocking Dilmunia's real estate potential.
This guide offers an overview of the Dilmunia's Real Estate market, insightful strategies for land sub-division, and an analysis of the potential returns and pricing trends.
Whether you're a veteran investor or exploring new horizons, this guide is your key to unlocking Dilmunia's real estate potential.
Dilmunia Island, a jewel in the Kingdom of Bahrain, presents a unique and promising landscape for real estate investment. Recent trends have shown a significant shift in the market, particularly influenced by global events like the pandemic.
1- Pandemic Impact: The expatriate population, a key driver for housing demand in Bahrain, saw a notable decrease during 2020 and 2021. This reduction, about 51,000 less than projected in 2021, signals a shift in housing needs and market dynamics. The peak levels of 2018 are not expected to be revisited until at least 2030.
2- Housing Demand Fluctuations: In response to these demographic changes, the demand for expat housing has adjusted. From an estimated 49,000 units in 2019, the demand dipped to 47,000 in 2020 and further to 46,000 in 2021. A gradual recovery is on the horizon, albeit moderated by limited economic stimuli.
3- Occupancy and Pricing Trends: The occupancy rates in the residential sector have echoed these trends, dropping from 77.7% in 2019 to 67.3% in 2021. This has been coupled with a decrease in average freehold sale prices and lease rates, marking a 6.6% and 8.6% decline, respectively, from 2018 to 2021. The market has seen a more pronounced price drop in higher-end properties.
4- Shift in Demand: Notably, there's been a pivot towards smaller housing units such as 1 and 2-bedroom apartments, while larger units like 3-bedroom apartments and penthouses are facing steeper price declines. This shift indicates a market recalibration in line with current demands.
In Dilmunia's real estate market, land sub-division strategies play an important role in maximizing investment opportunities. The island has witnessed a transformative journey in its land use and development approach, particularly evident in the evolution of its masterplan.
Masterplan Evolution: Dilmunia has seen a remarkable increase in the number of lands, from 49 in 2016 to 337 by 2022. This expansion, however, came with a reduction in total land area from 1.12 million m² to 958,594 m², underscoring a strategic shift towards smaller, more manageable plots.
Case Studies and Trends: Detailed case studies from Dilmunia and Amwaj Island reveal a trend towards smaller plot sizes. For instance, in Dilmunia, the focus has shifted to plots in the 600 – 700 m² range, while Amwaj shows a preference for even smaller sizes, primarily in the 0 – 300 m² category. This indicates a market inclination towards more compact, efficiently designed spaces.
Strategic Considerations: The process of land sub-division requires meticulous planning, considering various factors like engineering, urban design, and infrastructure needs. The challenge lies in balancing the loss of land area for infrastructure with the market demand for smaller plots. For instance, a plot of 35,820 m² might reduce to 25,914 m² post sub-division, indicating a strategic trade-off between land utility and infrastructure development.
Optimal Plot Sizes: In response to market demand and absorption trends, sub-divisions focusing on plots around 300 m², especially with SP/RA zoning, are recommended. This approach not only aligns with the current market gap but also adds a unique value proposition, offering something that is currently missing in the market.
Investors eyeing Dilmunia's real estate market can gain valuable insights from the detailed financial analysis of the three proposed sub-division plans. These plans highlight the potential financial outcomes from various land development strategies, outlining the plot types, sizes, pricing, and estimated revenue. The following tables provide a clear and structured view of these potential returns.
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