Reality check

Bahrain landlords have been warned against hiking rents of residential flats since it would mean the collapse of the real estate industry.

Real Estate Association Bahrain chairman Nasser Al Ahli told DT that tenants already find if tiring to cope with the increased living costs due to the removal of electricity and water subsidies; and a raise in rents would be the final nail in the coffin.

He reminded that the wilting economic situation in the Gulf, owing to the fall in oil prices, had already begun taking its toll on the low-income residents region.

Any extra burden would mean the kingdom losing its valuable workforce.

“If a landlord increases the rent, it will not be possible for most of the expatriate families to survive (in Bahrain) and would be forced to send their families back to their home countries,” said Mr Al Ahli.

“They would then choose to move to a bachelors’ residence.

“This would definitely reduce the demand for the residential flats.”

Hence the landlords who insist on the raising rents would do so at the risk of losing their clients, which will eventually affect the country.

“If we bear this small loss now, it will help us avoiding the big losses ahead,” Al Ahli warned.

He also said that after the new tariffs on electricity and water become valid from March 1, it would largely affect peoples’ spending capacity.

“We need to be caring about others in difficult times, it will also be good for our businesses in the long run,” he added.

According to another landlord Ali Almusalum, they had already reduced the rents a little to help the tenants adjust to the new situations.

He remarked that it was only wise to keep the existing tenant because it would cost more to renovate the flat for a new tenant.

It would also cost more time and money to find a new customer to occupy the flat a higher rent.

“It is a matter of demand and supply. “When demand is higher, the prices will be higher and if demand is lower the rents will be lower and those who do not understand this simple formula will ruin their businesses,” Almusalum cautioned.

He added that electricity and water were misused earlier but now the people would be more careful with the resources.

Another landlord Saad Hilal Al Sahali also advised against raising rents at all.

He said that whoever increased the rents would lose tenants immediately because they would pack and send back their families to their countries.