Interview: Sheikh Mohammed bin Khalifa Al Khalifa
How is real estate performing currently, and what input will the RERA have in shaping the future of the real estate market in Bahrain?
SHEIKH MOHAMMED BIN KHALIFA AL KHALIFA: The real estate market is cyclical by nature and currently trending towards the lower end of the cycle. This is challenging, not just in Bahrain but across the GCC and in many other major markets globally. The RERA’s primary objective is to develop an ecosystem that promotes Bahrain’s position as a leading destination for real estate investment both regionally and globally. Since the RERA commenced operations in March 2018 we have worked to increase transparency, improve investor and buyer protection, and regulate and license developers of off-plan projects and real estate service providers. Our aim is to help create a more sustainable market, which will ultimately increase investor confidence and activity in the sector.
To what extent is the RERA able to assist in promoting Bahrain as a real estate investment option?
SHEIKH MOHAMMED: The RERA has been focusing on building confidence in the sector by implementing regulations that will provide greater protection to investors and buyers through the introduction of robust regulations and licensing requirements. For instance, investors in off-plan projects will benefit from increased protection and transparency with the introduction of requirements on developers. These aim to provide full disclosure of information on development projects and allow buyers a consideration period, among others. In order to provide investors with timely, reliable data to make investment decisions, the RERA will pilot the Real Estate Databank in 2020. This database will provide a range of information including regional real estate trends and specific data on the local real estate market, such as sales, rental yields and pricing by property type.
Bahrain is the first country in the Middle East to fully adopt the International Valuation Standards with the introduction of the Bahrain Valuation Standards (BVS), which will also ensure greater protection for investors and other sectors, including the banking sector, which depends on accurate valuation reports when granting real estate finance to companies and individuals.
The combination of the BVS with the recently introduced Bahrain Property Measurement Standards will allow investors to compare investment opportunities in different jurisdictions based on a like-for-like basis using consistent international standards. We are confident that Bahrain will prove to be an attractive investment proposition when utilising such international standards.
The RERA is also collaborating with the Royal Institute of Chartered Surveyors (RICS) to design and deliver training programmes for real estate valuers, whereby they will receive international accreditation from RICS upon completion of the various programmes.
There is tangible evidence that Bahrain is punching above its weight from various global and regional rankings. For instance, Bahrain is ranked as the 45th most competitive nation in the world out of 141 countries based on the “Global Competitiveness Report 2019” published by the World Economic Forum.
What changes can we expect to see in the Bahrain real estate sector in the future?
SHEIKH MOHAMMED: We are embracing the digital future through the use of property technology. We expect it to drive changes in how we buy, sell, rent, market, transact, report and monitor real estate in the near future. New criteria, such as sustainability, are becoming more important factors for the end customer when buying real estate, so we can expect to see property developers using more innovative types of construction as eco-friendly materials become the norm.
The RERA is engaging with key government and private sector stakeholders to develop a National Real Estate Plan. Our objective is to address key issues for the sector, thus improving processes and increasing the attractiveness of Bahrain as an investment location.
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