Whether you’re a local or an expat, buying your first property in Bahrain can seem daunting, but we’ve compiled a step-by-step guide to enable a smooth and rewarding process. From navigating the real estate market and securing financing to legal requirements and finding the perfect location, we’re here to help you make a confident and informed investment.
Buying your first property is a major milestone, and Bahrain offers an attractive environment for both locals and expatriates looking to invest in real estate. With its growing economy, high quality of life and emerging property market, Bahrain has become an appealing destination for first-time homebuyers.
The Kingdom’s real estate market is dynamic, offering a mix of residential, commercial and investment properties. Over the last decade, the country has experienced significant growth, attracting both foreign and local investors. One of the key reasons is Bahrain’s freehold property ownership law, which allows expatriates to own property in designated areas such as Amwaj Islands, Durrat Al Bahrain, Seef, Reef Island and Bahrain Bay.
In Bahrain, you can find various types of properties, including:
- Apartments: Typically located in high-rise buildings, apartments offer a modern living experience, often with amenities such as gyms, pools and 24-hour security.
- Villas: These offer more space and privacy, usually located in residential compounds or gated communities, perfect for families.
- Townhouses: Townhouses provide a middle ground between villas and apartments, offering private space but at a lower cost than standalone villas.
- Commercial properties: For those looking to invest in business properties, there are office spaces and retail units available for purchase or lease.
Foreigners can buy property in Bahrain, but only in designated freehold areas. Citizens from GCC countries have more flexibility and can purchase property in most parts of Bahrain. When purchasing a property, it’s essential to understand your eligibility and ensure that the property you’re interested in falls within the legal zones for ownership.
One of the first steps to buying a property is determining how much you can afford. Your budget should include the cost of the property as well as additional expenses such as registration fees, legal fees and maintenance costs. Most banks in Bahrain offer mortgage services to both residents and expatriates. The mortgage typically covers up to 80 percent of the property’s value for locals and 60-70 percent for expatriates. Before applying for a mortgage, ensure you have a steady income, with a minimum salary of BD800 for expats and BD600 for locals, have a clean credit history and you should be within the required age range (usually between 21 and 60 years).
There are two main types of mortgages in Bahrain:
- Conventional Mortgages: These loans are offered by most banks and require monthly payments of both interest and principal over a set period.
- Islamic Mortgages (Ijara): These are Sharia-compliant and involve the bank purchasing the property and then leasing it to the buyer, with ownership transferred at the end of the lease term.
To find the best mortgage rate and terms for your property, shop around and consider factors like proximity to work, schools, hospitals, shopping centres and recreational facilities. Research upcoming developments and market trends to determine which areas offer the best return on investment. Popular expatriate areas include Juffair, Amwaj Islands, Saar, Seef and Adliya, each with its own unique lifestyle and community. Ensure the property is within reasonable distance from your workplace and consider future developments to maintain or increase property value.
A licensed real estate agent in Bahrain can simplify the property buying process by navigating legal requirements, providing market insights and negotiating on your behalf. Choose an agent with a solid reputation and familiarity with the area and property type. Agents typically charge a commission, ranging from 1 percent to 3 percent, so factor this into your budget. Before purchasing, understand the legal processes, as all property transactions in Bahrain must go through the Survey and Land Registration Bureau. Key steps include:
- Signing a Sales Agreement: Once you’ve found the property you want, you’ll sign a sales agreement with the seller. This document outlines the terms of the sale, including the price, payment schedule and any conditions.
- Due Diligence: It’s crucial to verify the legal status of the property, ensuring that the seller has clear ownership and that there are no outstanding debts or legal issues.
- Payment of Fees: You’ll need to pay a registration fee, which is 2 percent of the property’s value. Additionally, there may be legal fees, depending on the complexity of the transaction.
- Registration of the Property: Once all payments are made, the property will be registered in your name at the Survey and Land Registration Bureau, and you’ll receive the title deed.
For foreign buyers, it’s advisable to consult with a legal expert who specialises in Bahraini property law to ensure all the paperwork is in order.
Apart from the purchase price, several other costs need to be considered when buying a property in Bahrain. If you’re buying in a community or an apartment building, there will likely be monthly maintenance fees to cover shared services such as security, cleaning and landscaping. Protect your investment by purchasing home insurance, which covers damages or losses due to unforeseen events. There’s no direct property tax in Bahrain, but utility fees and municipal charges may apply. Before making a final decision, it’s crucial to thoroughly inspect the property. Check for any signs of damage, such as cracks, leaks or faulty wiring. If possible, hire a professional inspector to evaluate the condition of the property and provide a detailed report. This step can save you from costly repairs in the future.
The final step in the property-buying process is the closing. This is when the remaining payments are made, and ownership of the property is transferred. At this stage, you’ll receive the keys and title deed, officially making you the new owner. Make sure all final checks are completed, and ensure the property is free from any legal or financial encumbrances.
Buying your first property in Bahrain can be a rewarding experience, especially if you approach it with the right knowledge and preparation. By understanding the market, securing financing, choosing the right location and ensuring all legal requirements are met, you can make a sound investment that meets both your personal and financial goals. Take your time to research and work with professionals to guide you through the process, and soon you’ll be enjoying the benefits of owning your own home in this vibrant and growing country.
