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Dilmunia Island stands out as a prime real estate hotspot in the Kingdom of Bahrain, boasting a pivotal position in the Arabian Gulf. But it’s not just about location; the island's sophisticated infrastructure and lifestyle appeal have catapulted it into a high-demand investment zone. Recently, we've seen a significant surge in real estate investments here, with property prices climbing sharply, attracting global investors.
Dilmunia Island stands out as a prime real estate hotspot in the Kingdom of Bahrain, boasting a pivotal position in the Arabian Gulf. But it’s not just about location; the island's sophisticated infrastructure and lifestyle appeal have catapulted it into a high-demand investment zone. Recently, we've seen a significant surge in real estate investments here, with property prices climbing sharply, attracting global investors.
In this guide, you'll get a comprehensive look at Dilmunia Island's real estate market: from land division strategies to a sharp analysis of potential returns and pricing trends. Whether you're an experienced investor or scouting for new opportunities, this guide is your key to unlocking real estate investment opportunities on Dilmunia Island.
The foreign population, a primary driver of housing demand in Bahrain, experienced a significant decrease during 2020 and 2021. This drop, amounting to about 51,000 individuals, indicates a shift in housing needs and the dynamics of the island's real estate market. Moreover, a return to the pre-2020 levels, specifically those of 2018, is not expected until at least 2030.
In response to the demographic changes on the island, the demand for residential properties among foreigners declined from approximately 49,000 units in 2019 to 47,000 in 2020 and then to 46,000 in 2021. A gradual recovery in this sector is expected.
Occupancy rates fell from 77.7% in 2019 to 67.3% in 2021. This decline was accompanied by a decrease in the average selling prices of properties, with rental prices dropping by 6.6% and sale prices by 8.6% from 2018 to 2021. Moreover, the market experienced an even larger decrease in the prices of luxury properties.
Smaller units like one or two-bedroom apartments are gaining, while larger spaces, including three-bedroom and penthouses, see declining values. Align strategies with this clear trend for optimal returns.
Dilmunia experienced a significant increase in the number of plots, from 49 in 2016 to 337 in 2022. Despite this growth, the total land area decreased from 1.12 million square meters to 958.6 square meters, highlighting a market trend towards investing in smaller, more manageable plots.
Studies conducted on both Dilmunia Island and Amwaj Islands in Bahrain reveal a general trend towards subdividing land into smaller parcels. For instance, on Dilmunia Island, the focus has shifted towards plots ranging from 600 to 700 square meters, whereas Amwaj Islands show a preference for even smaller plots, particularly those ranging from 0 to 300 square meters.
The land division process requires meticulous planning, taking into account various factors such as engineering, urban design, and infrastructure needs. The challenge lies in balancing the loss of land area designated for infrastructure against the market's growing demand for smaller plots. For example, a plot's area can decrease from 35,820 square meters to 25,914 square meters after subdivision, indicating a strategic compromise between land utility and infrastructure development.
To meet market needs and trends, subdivisions focus on 300 m² plots, filling a current market gap with a unique offering.
Dilmunia real estate investors stand to gain from the strategic three-phase land division plan. This approach outlines land types, sizes, pricing, and potential revenue, offering a clear financial projection for development ventures on the island.
The following table provides a clear and structured overview of these potential returns.
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