Driving the success of the local Bahrain property market are a series of strong and sustainable factors, and now, realising the potential of property and in a bid to shore up and diversify their own asset and investment portfolios, leading Bahraini banks are in the UK seeking out viable entry points into the British real estate marketplace and the resultant effect is that Bahrain is making itself heard in the global property market.

At the release of the latest and as yet most luxurious residential real estate development in Bahrain yesterday, namely the Infinity Tower, Robin Williamson the managing director of DTZ Bahrain which is a leading property firm in the Middle Eastern archipelago stated that he believes all the fundamentals are right to allow for strong and sustainable growth in Bahrain’s residential property market for the next five years at least.

Driving the success of the property market are many factors – not least of which is the very fact that Bahrain continues to have an incredibly affluent economy and be a strong employer of overseas professionals who now have the right to purchase freehold property in Bahrain in certain areas.  Plain investment activity in Bahrain is also strong and now being bolstered by the fact that the King Fahd Causeway linking Bahrain to Saudi Arabia has become a commute route for Western expatriates who are working in Saudi but who prefer to house their families and indeed live and enjoy the far more conservative lifestyle in Bahrain.

The fact that Bahrain is intensifying its already concerted efforts for the diversification of the nation’s economic dependence away from the oil industry has led to it becoming the first Gulf state to have a free trade agreement in place with America and to being the central hub in the Gulf for many multinationals doing business across the region.

Understanding that the property market is a key contributor to many an investment house’s success, Bahrain based investment bank Gulf Finance House (GFH) have reportedly moved into the UK, established a significant presence and aligned itself for immediate market entry.  It is alleged by The Times Newspaper to be working with a former managing director of RBOS in terms of determining what to buy and when to buy it!

One can conceivably conclude that Bahrain and Bahrain based institutions must have learned a great deal from the successes and failures of Dubai and maybe they are now taking their time to establish a property industry and global real estate presence that will outstrip the successes of Dubai and leading Dubai based companies. Essentially it has been possible for foreign investors to purchase real estate in Bahrain since 2001 when a royal declaration was issued to that effect.

The declaration was fully endorsed and sanctioned in 2003 and it states that foreign buyers are permitted to buy certain types of property in certain areas of Bahrain.

Local interpretation of the rules relating to foreign freehold ownership of property in Bahrain nowadays see overseas investors purchasing any type of residential property on any reclaimed land development in the Kingdom.

According to the original terms of the royal declaration however, a foreigner wishing to purchase freehold property in Bahrain - whether for investment or residential purposes - was permitted to buy residential or commercial property in five specifically designated areas of the capital city of Manama.

Because of the popularity and success of certain property developments in these designated areas of the kingdom of Bahrain the government has subsequently issued an increasing number of licenses to companies for land reclamation and it is on this reclaimed land that the newest and most popular property developments are being constructed.  Foreign investors wishing to get in on the booming Bahraini property market are buying into these developments.

In terms of the property buying process in Bahrain it proceeds in a similar way to the majority of buying processes worldwide.  Investors are advised to seek independent legal assistance throughout the entire purchase process of course and the legal property ownership rights in Bahrain are sophisticated and well developed meaning the purchaser is protected once permission to purchase has been granted and deeds of ownership transferred into the investor’s name.

The amount of investment property available for sale in Bahrain to overseas investors is physically restricted by the small land mass of the kingdom and by the fact that freehold ownership if only allowed in certain areas of the country; therefore it is this restriction of supply that will ultimately push up prices because the demand for real estate for sale to international investors and expatriates living in Bahrain is not abating.

Rhiannon Williamson writes about living abroad and investing in international real estate.  She also maintains www.amberlamb.com - which is an online resource for expatriates, international investors and anyone planning a new life abroad.