Bahrain recorded a GDP growth of 2.4% in 2023, a decline compared to 4.9% in 2022, however, a projected annual real GDP growth of 3.0% in 2024 is expected, driven primarily by the non-oil sector, which is expected to grow by 3.8%.

The Kingdom has also recorded a significantly decreased inflation rate, however there is a possibility of an average increase of 2% throughout 2024. 

In Q1, 6,124 real estate sales transactions were recorded, indicating a 3% drop in trading compared to the corresponding period in the previous year. 

The report’s key highlights are:

• Bahrain's real estate sector continued to grow, driven by government support, increased demand, and rising investor confidence, though a surge in new projects may impact capital values, especially for high-end villas.
• Overall rental values in Bahrain's residential sector declined slightly, with apartment rents decreasing by 1.3% and villa rents by 1% year-on-year, particularly affecting low-end properties.
• Bahrain's office sector was quiet, with businesses renewing leases in Grade A properties, leading to a slight rental rate decline of 1.8% year-on-year and stable capital values despite new quality completions expected to correct rentals further.
• Financial services and government entities were key demand drivers, along with rising interest in LEED-certified and co-working spaces.
• The retail and trade industries in Bahrain were stable in Q1, with rental rates holding steady for the fourth consecutive quarter, boosted by a festive season surge in mall footfalls and government efforts to attract tourists, although strip retail rentals declined by 1% year-on-year.
• The manufacturing sector was the main driver of demand in the industrial market, with space occupancy between 1,500 and 3,000 sqm, and despite a 1.2% year-on-year increase, rental rates for large and medium-sized warehouses have remained steady.