Price reductions spur sales in real estate market
The inventory glut of condos is finally easing and homes priced or reduced to under $1 million are selling well as some buyers snap up perceived bargains.
This from Coldwell Banker Bermuda Realtys latest Property Ladder report, which also reported a rise in commercial property sales.
But indications are that the housing market is still not recovering, with Bermuda Realty predicting the total number of sales in 2012 will be as much as 75 percent less than five years ago.
Still, the good news is that condos are selling. In fact, 19 percent of what has sold in 2012 thus far have been condos, the company reported.
And the condo inventory has decreased, the company said. Yes, that is correct, decreased. The inventory has diminished from the highs in 2008 of 60-plus percent to 40 percent of the market today. This is as a result of lower prices and in some cases owners who have decided not to sell.
Bermuda Realty added: Property under $1 million seems to be the most popular choice with 74 percent of sales thus far (through August) for 2012 in this category; 45 percent of which are under $750,000.
Commercial properties are selling too with 11 percent of total sales compared to less than two percent in 2011 and five percent in 2010. And amazingly we are finding that many buyers have cash ready for deposit and closing costs.
A spokeswoman for the realtor explained that property under $1 million was most popular, because this is the segment in which we have seen the most significant price reductions and buyers sense they are getting a deal. Many assume that condos in particular are not selling, but if they are in a good development and priced right they are still very attractive to those entering the real estate market.
She added: People are always asking, hows the real estate market ... and despite a decrease in both the number of transactions and property prices we still maintain that the market is doing well!
There are incredible opportunities available for people to take advantages of. Property prices have dropped on average 25 to 30 percent in some segments and savvy consumers realise that now is the time to buy! One never knows when the market will turn until prices start to rise.
Contrary to popular belief, property is selling albeit with less frequency than several years ago. In fact, we predict the total number of sales in 2012 will be 75 percent less than five years ago.
Recent regulation changes potentially could create new demand in the market, including: Permanent Residency Certificate holders can now purchase any condo on the Island that is not Government sponsored; non-Bermudians can purchase from anyone as long as the property annual rental value is over the threshold; and Bermudians with non-Bermudian spouses no longer need a licence for their first home and can purchase more than one property (with Government approval).