Real Estate ‘On Fire’ With $400m In Deals
By NEIL HARTNELL
Tribune Business Editor
Realtors yesterday said the market’s international segment is “just on fire right now” with some estimating that $400m worth of property was sold or went under contract during the 2021 first quarter.
Timothy Smith, a partner at Better Homes and Gardens Real Estate MCR Bahamas Group, told Tribune Business it was likely the amount of real estate involved in such transactions was “double” the $200m shown by the industry’s Multiple Listing System (MLS) as this typically captures around 50 percent of sales activity.
“Real estate right now in terms of non-resident buyers is just on fire right now,” he said. “Total sales volume for sold properties and properties under contract exceeded $200m on the MLS in the first quarter, with properties in Nassau accounting for approximately half that total.
“The MLS represents about 50 percent of sales and properties because it doesn’t take into account sales by private developers such as Albany and Gold Wynn, which are on stream and doing really well, and private sales. From my knowledge there’s been two private sales island sales not on the MLS. As a result, you’re looking more over $400m.”
Tribune Business sources, speaking on condition of anonymity, yesterday revealed some $70m worth of Harbour Island real estate has sold in the past six months alone as wealthy international buyers seek warmer, more remote locations in which to work while escaping countries and regions with high COVID-19 infection rates.
Mr Smith yesterday said transaction volumes had “probably doubled” compared to pre-COVID levels, and added: “The first quarter is traditionally the busiest part of the real estate season. It’s been exceptional. The demand is just pent-up, and with COVID-19 going on people have realised they don’t have to be where the company is. They can work remotely.”
He was backed by other realtors. Mike Lightbourn, Coldwell Banker Lightbourn Realty’s principal, told this newspaper of the international buyer market: “That’s the bright spot. It’s very strong at the moment. I don’t know how much longer it stays strong, but as long as it stays it will be bringing in good revenues for the Government.”
He added that activity was “better” than pre-COVID levels “because there’s a pent-up demand which is being fulfilled now. I don’t know how much longer it continues”.
Christine Wallace-Whitfield, the Bahamas Real Estate Association’s (BREA) president, echoed Mr Lightbourn’s assessment by saying: “It’s extremely strong. This is the high-end market. Pre-COVID, my goodness, it’s definitely much stronger than it was back then. It could be a few factors behind it; everybody’s been trying to figure it out.”
She added that several buyers from the US north-west and mid-west had purchased high-end properties “sight unseen”, while the lifting of travel restrictions and increased vaccination roll-out across the US meant the number of prospects flying to The Bahamas to explore real estate had increased over the past month.
With properties valued at $700,000 and upwards in high demand, Mrs Wallace-Whitfield said: “I think the main thing is that people just want to find a piece of paradise. They want to get away from cold weather.
“Hopefully we can keep this up for a long time. I know from Europe and the UK there seems to be a lot of interest. A lot of people from there are planning trips for May. There are a lot of people saying they have got clients and customers coming in from Europe in May. I hope this continues for our economy. It’s been a nice surprise.”
Real estate transactions involving international buyers are a valuable source of foreign currency earnings at a time when tourism remains depressed, helping to boost The Bahamas’ external reserves and maintain the vital one:one fixed exchange rate peg with the US dollar.
They also represent critical tax revenues for the cash-strapped Public Treasury, while the money spent in the local economy by purchasers with the likes of retailers, restaurants, auto dealers, landscapers/gardeners, contractors and furniture stores offers further support for employment and incomes.
Mr Smith, meanwhile, said existing property owners who escaped to The Bahamas during COVID-19 were likely to have sold their family and work colleagues on the merits of owning a home in The Bahamas.
“I have a client flying in from Europe on Friday, where they’re not allowed to leave their homes,” he added. “He’s from Italy. There are still a lot of places on lockdown. For them to work remotely, move around and not be locked down is huge.”
Mr Smith said there had been “a dramatic increase” in purchases of properties valued at $3m and above, and added: “There’s typically a slowdown around May/June, but from what I’m seeing I think this demand is going to go straight through the rest of the year. It’s not just The Bahamas but places like south Florida. It seems like a lot of people are rebounding and opening their minds to new locations.”