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Lowered interest rates will boost GCC real estate market
Mortgage rates of three percent are more realistic for potential home buyers in Bahrain, say financial analysts.
June 2, 2010 4:27 by Katherine Azmeh
GCC housing prices are poised to fall with changes to the local mortgage industry, according to Central Bank of Bahrain Executive, Khalid Hamad, Zawya.com reported Wednesday.
‘Current prices are not affordable or realistic, and further falls are necessary and then economic fundamentals will start rebuilding market confidence,” he said at the inaugural GCC Mortgage Summit 2010 in Bahrain today.
Hamad added that real estate bubbles remain in the market and are poised for correction. In commercial sectors, particularly, he said demand remains weak against a backdrop of inflated prices. He added that housing supply is excessive in the high end of the residential retail market, where demand remains weak.
Analyst from Ernst and Young, Sameer Abdi , said that given average salaries in Bahrain, mortgage interest rates would realistically need to settle around 3 percent for most locals to afford to buy their own home.