A record number of luxury homes were sold in Bermuda in 2005 according to figures released yesterday by Coldwell Banker Previews International.

The sale of 30 luxury homes ? classified as any home priced at or above $2.5 million ? represents a 100 percent increase over 2004 when just 15 homes in this category sold.

The highest priced property last year sold for $10 million which is not a record.

Coldwell Banker Previews International realtor Brian Madeiros said that it is ?phenomenal? that the market produced 30 such sales.

?It shows that price bands and the luxury market are really starting to rise,? he said.

?Bermudians have been the prime drivers of our luxury home market and that has occurred because Bermudians are really benefiting from our international business sector and the local service sector which supports that group,? Mr. Madeiros said.

The typical home buyer is ?younger, more affluent and lives in Bermuda? according to Coldwell Banker?s statistics for luxury home buyers last year which show that 60 percent of those buyers had kids under 20, while 70 percent of them were aged 40-50 and 60 percent were Bermudian.

The increase in luxury sales mirrors what has happened in the United States where the high end residential market ? homes priced at $3 million plus ? recorded a 35 percent increase in the first quarter of 2005 over the first quarter of 2004.

Economic analysts are confident that some US real estate will outperform stocks and bonds and Mr. Madeiros said that the investment story is much the same here.

Across the board, property investments are offering very healthy returns via rental income and through capital appreciation, he said.

Just 16 homes that were on the market last year met the annual rental value threshold of $153,000 plus required to qualify for sale to a non-Bermudian. However although they met the ARV threshold, just seven of those properties qualified to be sold to non-Bermudian buyers due to a regulatory change last February.

That change stipulated that even high-end properties can only be sold to non-Bermudians if the current owner is non-Bermudian. Just four homes of the seven homes available to non-Bermudian buyers ended up in overseas hands.

Mr. Madeiros said, however, that while last year was a ?tremendous year for the very upper end of the residential market?, the actual number of overseas buyers looking for property by year end were few and far between. He is not overly optimistic about overseas purchases in the first half of 2006 although they are expecting an overseas buyer to close on a significant waterfront sale in the near future.

?There is a possibility that buyers may be frustrated by some of the entry barriers we have to our marketplace,? Mr. Madeiros said adding that last February?s policy has significantly reduced the number of potential buyers for the luxury homes.

A day after last February?s policy change, the inventory of homes priced above $5 million and available to overseas buyers dropped from 20 to 7. At year-end 2005, wealthy overseas buyers who wanted to acquire large homes in Bermuda had a choice of just 12 free-standing homes.

There are also signs that overseas purchasers are preferring to look further south for luxury free-standing estate property, according to Mr. Madeiros who points out that the Caribbean offers potential buyers more choice in the luxury price range and fewer entrance barriers to their residential marketplace.

?What we are finding now is the global buyer is comparing and contrasting between international jurisdictions more diligently than they used to and individuals who have the means suggest perhaps there may be better value elsewhere,? Mr. Madeiros said adding that while the Island is moving to upgrade tourist accommodations and introduce new markets such as fractional sales products if Bermuda wants to attract wealthy residents ?we have to be offering individuals other accommodation as well ? not just town homes, condos or hotel accommodation.?

He adds that while Bermuda has rightly always had entry barriers to control supply and demand due to its small size, last February?s policy has made it harder for wealthy overseas buyers to live here.

?If we?re trying to encourage wealthy people to live here that has a negative impact. If we?re not trying to encourage wealthy people to live here then the policy decision reflected that stance,? he said.