- According to a report by Mordor Intelligence, the market size reached $4.26 billion in 2025
Bahrain’s luxury residential real estate market is experiencing sustained growth, driven by a combination of economic, investment, and social factors. According to a Mordor Intelligence report, the market size reached US$4.26 billion in 2025 and is projected to rise to US$6.12 billion by 2030, representing a compound annual growth rate (CAGR) of 7.5%. This growth reflects increased cross-border wealth, reforms allowing 100% foreign ownership, and major national infrastructure projects valued at US$30 billion. These factors are expanding the luxury real estate market and attracting investors who previously focused on neighboring Gulf markets.
Development activity is currently concentrated on large-scale beachfront developments, such as Bahrain Bay and Diyar Al Muharraq, which combine residential towers with five-star hotels and retail facilities. This allows developers to charge premiums of 20% to 30% compared to inland locations. The scarcity of waterfront land is driving up prices for villas and luxury homes, while flood-resistant designs and sustainability standards add value for investors interested in environmental, social, and governance (ESG) criteria.
The growing affluent population in the GCC and the wider region is significantly increasing demand for luxury real estate, with high-net-worth buyers representing a growing share of the market. These buyers prioritize location, privacy, and long-term value over price, resulting in high initial sales rates for waterfront villas, with some projects achieving pre-sales exceeding 80% before construction even began.
Reforms allowing full foreign ownership and the introduction of the Golden Visa have removed traditional restrictions on foreign investment, making Bahrain an attractive destination for global capital. The report indicates that operating costs are 27% lower than those of competing financial centers in the GCC, enhancing the market’s appeal for individuals and companies seeking a cost-effective regional headquarters. There has also been a rise in inquiries from European and Asian investors who were previously hesitant to consider Bahrain due to joint venture requirements.
In terms of infrastructure, the $2 billion Bahrain Metro project and the $3.5 billion King Hamad Causeway enhance connectivity between areas, particularly between Manama and the Northern Governorate. This expands the buyer base and stimulates demand for luxury properties in new developments. These projects also support sustainable transportation and reduce car dependency, making the region attractive to young expatriates and professionals.
Regarding property segments, villas and single-family homes dominated the market with a 70.11% share in 2024, reflecting Gulf families’ preference for privacy, outdoor spaces, and multigenerational designs. In contrast, apartments and condominiums are expected to experience the fastest growth, with a CAGR of 7.89% between 2025 and 2030. This growth is driven by foreign investors and younger buyers seeking ready-to-move-in solutions and integrated amenities such as hotel services, private elevators, and rooftop recreational facilities, thus bridging the gap between villas and vertical living.
In terms of business model, sales dominated the market with a 56.12% share in 2024, while rentals are projected to grow at a compound annual growth rate (CAGR) of 8.59% between 2025 and 2030, driven by increased demand from international investors seeking stable returns. Secondary resale transactions remained dominant at 63.11% in 2024, while the primary sales market for new projects grew at an 8.09% CAGR, supported by modern projects incorporating smart systems, LEED/BREEAM certifications, and blockchain technology, which are expanding the investor base.
Geographically, Manama City captured 31.55% of the market share in 2024, thanks to its financial and commercial infrastructure and high-end amenities, while the Northern Governorate is the fastest-growing region with an 8.85% CAGR, benefiting from lower land costs and planned waterfront projects. Muharraq and Juffair continue to attract specific segments of buyers and renters seeking a lifestyle that blends heritage and culture with easy access to international schools and amenities.
Competition is fierce, with major developers consolidating land and integrating construction, sales, and property management functions, while partnerships with international hotel brands set a benchmark for quality and service. The adoption of modern technologies, such as blockchain-based property tokenization, expands the investor base and reduces barriers to entry, while smaller developers face challenges in complying with AML/KYC financial regulations.
According to Mordor Intelligence, the leading developers in the market are Diyar Al Muharraq, Bin Faqeer, Eagle Hills/Marassi Al Bahrain, Nasaj BSC, and Durrat Al Bahrain, who are driving the expansion of luxury projects and implementing innovative strategies to support pricing and enhance customer satisfaction.
In short, the luxury residential real estate market in Bahrain, according to Mordor Intelligence, reflects a combination of local and international demand, a focus on sustainability, infrastructure improvements, and legal reforms. This makes it a promising market with strong and sustainable growth prospects until 2030.