Greater interest in real estate rentals
There is a distinct uptick in interest around the real estate rental market since the announcement that the America’s Cup is coming to Bermuda, according to Coldwell Banker agency manager Susan Thompson.
This is important because, Coldwell Banker says, quoting The Royal Gazette’s business editor Jonathan Kent, economists worldwide are citing real estate as well as other indicators in predictions of changing global economies.
“The recent Tourism Summit was well attended and acknowledged that vacation rental homes play a large part of the tourism mix in Bermuda and the BTA would like to expand this market,” Ms Thompson said.
“Coldwell Banker Bermuda Realty have actually had a comprehensive portfolio of vacation homes for a number of years now. During the worldwide recession there was a small dip in business, but this year the inquiries for summer 2015 are up by 25 per cent.”
She said summer last year was “encouraging” and that they hoped this year would be even busier.
“The main months for requests are June, July and August, but we do try to encourage rentals during the mild winters we enjoy,” she said. “However, most requests are from families, so school holidays have to be recognised.
“All Bermudians must surely be excited for the opportunities offered by the America’s Cup and the audience it will attract. It goes without saying that we are actively searching for more quality homes for our portfolio, from one-bedroom units through to large five-bedroom homes.
“The offer of a swimming pool or waterfront is always enticing and many guests make this request.”
Coldwell Banker said a leading indicator of the resilience of the real estate market was the residential rental market.
“While there is no central recording of all rental transactions Island-wide, Coldwell Banker Bermuda Realty maintains the leading share of the residential rental market,” the realtor said.
“From our year-end figures, we can report that the number of rental transactions is up 20 per cent over 2013. Overall there have been no significant price increases over the past 12 months, but we are seeing marginal increases and prices are no longer falling.
“City living and centrally located units are bouncing back much faster than rentals at the ends of the Island.
“Commercial property rentals offer another encouraging sign that the economy in Bermuda is improving.”
Coldwell Banker analysis suggests that 2014 will show positive real estate sales growth in volume, and 2015 should continue this trend. Final data will not be available until midyear but, based on the number of sales registered in Government records, condo sales for last year were up 8 per cent from 2013. Single-family homes are continuing to trend well, making up 40 per cent of the number of sales last year, compared with 26 per cent in 2013.
The realtor said: “Overall, average property prices have maintained consistency when compared over the last two years with the average hovering around $1.1 million. In reviewing property sales by parish, it will come as no surprise that Pembroke and Paget were the leaders in 2013, and Warwick is leading 2014 totals.
“This reinforces that central parishes remain the desired locations and with preferred location comes premium market prices. Keeping with that thought, St George’s parish continues to tip the scales with the highest average price, reflecting the wealthiest homes in the Tucker’s Town area. Sandys continues to offer the most value on the dollar.
“Sales transactions are up and inventory is at its lowest point in over five years, but we move into the new year with the understanding that we have a long way to go in this recovery.
“Bermuda goes into 2015 with better economic growth prospects than at any time since the global financial crisis struck six years ago.”
Albert Moura, of Moura & Associates Realtors, has also seen a rise in interest.
“Demand for rental units has increased over the last six months and, as a result, rental prices have been firming up,” he said. “We are just at the beginning of the process for the America’s Cup, so haven’t felt too much impact yet. Our demand has been mainly from exempt companies, although I expect in the coming weeks and months for that to ramp up, putting upward pressure on prices.
“On the sales side, there certainly has been an increase in activity and some of that is due to increased confidence in the economy — the America’s Cup plays a part in that.”
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