Ahmed ElAmin . The rental market has been inflated by demand from the international sector.

In Bermuda's booming economy, renters and house buyers are finding it difficult to find a roof to put over their heads.

It's a sellers' market and Rego Realtors owner Buddy Rego estimates house prices increased an average of about 10 percent in 1998. That's if you could find the kind of place you want to buy.

Houses are just not coming on the market, he said.

"Everyone would agree that in the past two to three years we have had an extremely strong market so much so that business is thin now mainly because of a lack of inventory,'' he said.

Rego Realtors is this year celebrating 50 years of being in business. Mr. Rego took over the firm -- which currently has 15 employees -- from his father Benjamin Rego Sr. 16 years ago.

For the buyer, the lack of housing on the market means there is less choice and higher prices on what's available. The high demand and low availability of housing has continued into the new year Mr. Rego said.

While volume of property sales was not as much as in the boom years of the 1980s, the value sold was the highest in the 16 years Mr. Rego has run the firm.

"It's certainly more of a sellers' market than a buyers market simply because of supply and demand,'' he said. "A well-maintained property priced properly will sell in this market.'' He also noted financial institutions have a good supply of mortgage money available for prospective home owners at more competitive rates than in the past. Funding is also available for longer periods of time.

"The health of the market is probably better than it has been in many years,'' he said.

The strongest demand has been for houses in the $400,000 to $900,000 range.

Because of the strength of the international business sector, demand and sales have been high to non-Bermudians. Sales have levelled off in the last six months as fewer properties are now available for sale.

The high demand has encouraged Bermudian owners to rent their properties out to international sector businesses. The owners have in turn moved to rented properties in turn putting high demand pressure on that market. "The pressure on rents travels all the way down the food chain,'' he said. Meanwhile, condominium sales have been generally low because the size and quality demanded by the market hasn't been available. Mr. Rego expects sales to pick up over the next year as new condominium properties being built come on the market.

Condominium owners have in general preferred to rent their properties out as the rental value has increased much faster than the sale value. For example a two-bedroom condo which rented for $1,800 five years ago can now fetch between $2,500 and $3,000 a month. "There are some new proposed developments at various ends of the Island that are going to for the first time offer much more choice,'' Mr. Rego said.

Rents have been going through the roof, doubling in the past seven to ten years. The pressure on rental prices has hit the lower income market harder.

Well maintained apartments are becoming extremely difficult to find. Many places are being passed on by word of mouth.

"The rental market is extremely thin,'' Mr. Rego said. "The problem for the prospective tenant is that they are really at the hands of a market that is in many ways artificially inflated due to the demand from the international sector. International companies are not allowed to own properties. You end up having studios commanding $1,000 a month. In the higher end of the market there are just a few houses on the market. It's an overheated marketplace. You are forced to take things that are overvalued and in some cases substandard.'' He advises tenants in the lower end of the market to ensure landlords in rent controlled properties don't raise rents without having the proper approval from the authorities. Properties with an annual rental value of $9,900 or lower are in the rent controlled category. Landlords of such properties must first apply to increase rents.

Buddy Rego HOUSING HSG BUSINESS BUC