With property values continuing to climb, chief executive officer at real estate agency 1 Oak Bahamas, Matt Sweeting, warned that if homeowner hopefuls don’t buy now, they may have no choice but to rent forever.
“Rent Forever” is the title of an upcoming masterclass in real estate Sweeting intends to lead this weekend at the Owning 23 event, being held in partnership with CIBC FirstCaribbean International Bank.
“I will be talking about how aggressively we are seeing an appreciation of prices in The Bahamas. Again there are a number of market factors that affect that,” he said during an appearance on Guardian Radio talk show Morning Blend yesterday.
“We talk about scarcity, we talk about the cost of construction, we talk about New Providence being the most densely populated island, and a number of these factors are driving considerable costs of appreciation. I was running the numbers in preparation for this presentation, and the average appreciation on real estate is somewhere to the tune of about three to four percent a year.We’ve been seeing numbers skewing a little bit higher here. Some of the inventory that’s coming on the market is indicative of upwards of a nine percent appreciation.”
Pointing to a recent case study he conducted on a local development on New Providence, Sweeting said eight years ago a single unit was being sold at $260,000. In today’s climate the same development company is launching a second phase with nearly identical units being sold at $450,000.
He said a number of factors, including the higher price of building materials, have contributed to that increase, and it shows that prices for real estate are trending up and staying up.
“So what that is indicative of is a considerable appreciation in price, which is supported by some market data. But again, what I think is fairly alarming for the buyer of today is that eight years ago, you needed to earn $40,000 for about a $1,500 a month (mortgage) payment. Today for the same unit you need to make about $70,000,” he said.
“What this is telling you is that if you do not buy now, you have no choice but to rent forever. This is why we think now is the time to buy, you need to lock in your price, start the process, because the longer you wait your value decreases with the bank.”
Registration for the in-person event, being held at New Providence Community Center this weekend, is already at capacity; however organizers said slots for virtual attendance are still available at Owning23.com.
CIBC FirstCaribbean International Bank District Manager Ingrid Johnson said the event will help strengthen the financial literacy of attendees.
“I think it’s important not only to own property, but to understand your financial position. It’s important to understand simple things, your income, your expenses, what are some of the things you can plan towards and how do you get to that end goal of acquiring your dream of a home. It’s just as important as physical health. Being financially healthy makes you more confident, it allows you to be able to get yourself out of a situation to start to build that wealth and start to do it,” she said.