Bahrain to limit rent hike to 5%

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Bahrain ManamaThe Bahraini parliament on April 9 approved legislation to cap rental increases at 5 per cent a year. The new maximum is half the current 10 per cent allowed, ArabianBusiness reported.

Rents across the Gulf have been rising amid a recovery from the property recession that hit in 2009-10.

Steve Mayes, director of sales and agency at real estate consultancy firm CBRE Middle East, welcomed the move, which he said demonstrated the “the government of Bahrain’s far-sightedness.”

“The recent rental cap announcement is an important piece of regulation that seeks to limit future volatility in the Bahrain markets. Without it we could potentially expect to see rents rising above an affordability limit, and so affect Bahrain’s competitive environment,” Mayes added.

The legislation requires the approval of the Shura Council and King Hamad bin Isa Al Khalifa.

Bahrain’s real estate sector surged to a 3-year high of $1.164 billion in 2013 and is projected to gain pace in 2014, official figures show.

The sector’s value added accounted for nearly 3.6 per cent of the country’s GDP in current prices, the central information organisation said in a report published by the Bahraini Arabic language daily Al Wasat.

A breakdown showed the sector value added stood at $286 million in the first quarter, $291.2 million in the second quarter, the same value in the third quarter, and $293.8 million in the fourth quarter.

“The sector’s value added in current prices last year was higher than in 2012 and 2011 but remained below the 2010 value of $1.167 billion. The sector is projected to be higher in 2014,” the report said.

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Reading Time: 2 minutes

The Bahraini parliament on April 9 approved legislation to cap rental increases at 5 per cent a year. The new maximum is half the current 10 per cent allowed, ArabianBusiness reported.

Reading Time: 2 minutes

Bahrain ManamaThe Bahraini parliament on April 9 approved legislation to cap rental increases at 5 per cent a year. The new maximum is half the current 10 per cent allowed, ArabianBusiness reported.

Rents across the Gulf have been rising amid a recovery from the property recession that hit in 2009-10.

Steve Mayes, director of sales and agency at real estate consultancy firm CBRE Middle East, welcomed the move, which he said demonstrated the “the government of Bahrain’s far-sightedness.”

“The recent rental cap announcement is an important piece of regulation that seeks to limit future volatility in the Bahrain markets. Without it we could potentially expect to see rents rising above an affordability limit, and so affect Bahrain’s competitive environment,” Mayes added.

The legislation requires the approval of the Shura Council and King Hamad bin Isa Al Khalifa.

Bahrain’s real estate sector surged to a 3-year high of $1.164 billion in 2013 and is projected to gain pace in 2014, official figures show.

The sector’s value added accounted for nearly 3.6 per cent of the country’s GDP in current prices, the central information organisation said in a report published by the Bahraini Arabic language daily Al Wasat.

A breakdown showed the sector value added stood at $286 million in the first quarter, $291.2 million in the second quarter, the same value in the third quarter, and $293.8 million in the fourth quarter.

“The sector’s value added in current prices last year was higher than in 2012 and 2011 but remained below the 2010 value of $1.167 billion. The sector is projected to be higher in 2014,” the report said.

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