Easing restrictions would get Bermuda real estate market moving, say realtors
Bermudas real estate market might be doing much better if it wasnt so tightly restricted and entry costs so high.
This from leading local realtors as they reacted to a reported real estate boom in the Turks and Caicos, which has seen home sales vault a reported 70 percent over the past year (see separate story).
John M Sinclair of Sinclair Realty, the Bermuda affiliate of Christies International Real Estate, said: In Turks and Caicos, no restrictions apply to the acquisition of real estate by foreign individuals and there are simple, approved methods for foreign companies to maintain property interest. On the other hand, foreign investment in Bermuda real estate is highly restricted and dependent on Government policy.
No matter how well intended or necessary these policies have been or may be, the result is an artificial and discretionary market that can be altered significantly with a stroke of the pen. Within reason, if Bermuda were a more open marketplace for foreign investment and maintained consistency of policy, wed be experiencing a very different set of dynamics across the spectrum of our real estate market.
Mr Sinclair added that he had spoken with Christies in Turks and Caicos, Katherine Baryluk of Regency International Estates, and she said the figures and information in the TCI Sun article may not be a completely accurate representation of the entire market.
However, Regency does report that there is increased sales activity at the moment in the Turks and Caicos.
Rego Sothebys International Realty president Buddy Rego, who is also director of TCI Sothebys International Realty, said the property recovery in the TCI basically came down to: 1 TCI reduced the stamp duty on purchases; There is no licence fee as in Bermuda; Tourism numbers increased with increased airlift over the past two years; Investor confidence increased with now stable Government in TCI.
In Bermuda the foreign buyer licence fee is 25 percent for houses and 18 percent for condos and 6.5 percent in resort properties. There is no licence fee in the TCI.
Susan Thompson, agency manager for Coldwell Banker Bermuda Realty said its difficult to compare Bermuda with TCI: For starters TCI is 200 square miles compared to our 22 square miles.
However, Ms Thompson added: With respect to policy governing the associated acquisition of property by overseas buyers entry costs are significantly lower compared to Bermuda. We cannot compete on the basis of current alien licence fee levels.
Locals have been purchasing fewer Investment properties in Bermuda in the past three to four years due to the decreasing expat population.
The government has recently made some positive changes with non-Bermudians now able to purchase any house on the island with an ARV of $177,000-plus regardless of the owners nationality; PRCs able to purchase any condo that is not government sponsored and non-Bermudian spouses of Bermudians no longer needing a licence to purchase.
More changes are needed in order to help stimulate the housing market in Bermuda while acknowledging the importance of ensuring a sustainable and affordable market for Bermudians. In closing, property is selling in Bermuda although at significantly lower transactional rates than four years ago. Economic recovery and increasing consumer confidence will most certainly have a positive impact on our market.