Bahrain's real estate market saw a significant jump in transaction volumes during the first half of 2025, but a new report from global real estate services firm CBRE Middle East reveals limited change in performance across key sectors.

The latest Bahrain Real Estate Market Review for H1 2025 highlights a 16.4 per cent increase in the number of real estate transactions compared to the same period last year, totalling 13,452 transactions. The value of these transactions also rose by 3.9pc, reaching BD775.2 million.

Despite the rise in transactions, the residential sector showed mixed performance. Average apartment and villa sales rates both saw slight declines, falling by 2pc and 2.3pc respectively. However, demand for affordable housing remains strong, with 2,584 applications for housing financing schemes approved.

In a first, quoted apartment rents saw a marginal 1pc increase, while villa rents continued their slow decline, dropping by 1pc.

The retail sector experienced a drop in average occupancy, which fell by 1.9pc to 66.9pc. This was largely due to the opening of Avenues Phase 2, which added a significant amount of leasable space to the market. This new supply is putting pressure on smaller retail centres to innovate and diversify to attract footfall.

The office market saw little change, with average rental rates holding steady. Demand for pre-fitted offices is high, as companies look to reduce initial capital expenditure and move in quickly. The report also noted a growing interest in sustainable design, with upcoming developments aiming for certifications like LEED.

Bahrain’s tourism continues to grow, with a 19.9pc increase in inbound tourists in 2024 compared to the previous year. While this bodes well for the hospitality sector, key performance indicators like Average Daily Rates (ADRs) and Revenue Per Available Room (RevPAR) saw only marginal increases in the first half of 2025.

Commenting on the findings, CBRE Bahrain director Heather Longden said: “Bahrain’s real estate market in H1 2025 demonstrated positive movement in transactions, with a 16.4pc increase in volume and a 3.9pc rise in transaction values according to the SLRB, despite limited change in the segments tracked by CBRE. While the residential sector saw mixed performance, there was a marginal decline in actual recorded sales rates. The retail sector faced occupancy adjustments due to a notable increase in GLA stock based on new supply coming on stream. The office sector remained stable in terms of average rents, with a continued preference for pre-fitted spaces. The hospitality sector continued its positive momentum in terms of growth in tourism figures; however, gains were marginal in key performance indicators.”

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