Rents on executive properties are coming down, according to many local realtors -- but there are no clear indications as to why.

Reduced growth of the local economy, fewer numbers of foreign workers, and reduced housing allowances from exempted companies were some of the reasons local realtors suggested as causing the decline.

All realtors who spoke with The Royal Gazette agreed that the high end market has realised a significant fall in rental prices especially compared with rates of five years ago.

"Properties that were renting anywhere upward of $12,000 a month, I would say are going for less now,'' said Sterlin Smith, estate and sales manger for Roderick DeCouto Real Estate Ltd..

"Some landlords are surprised to find that their properties cannot fetch rents they have already enjoyed,'' he said.

"I know a landlord who was getting $8,000 a month for a home but when the lease ended in September, despite making some improvements, no-one was interested. Eventually the rent had to be reduced to $7,000 and the house was rented at the end of January.'' A spokesperson for Dorchester Realty stressed that declines are only being seen in the top end of the market.

"I would agree that the very expensive high end properties are coming down in rent,'' the spokesperson said. "A home that would rent for $17,000 a month last year, would probably not go for more than $14,000 or $15,000 now, possibly even down to $12,000.'' Kendra Mello, marketing manager at Bermuda Realty attributed the fall in rental prices to "the fluctuation of the economy''.

"I do think the local economy is beginning to slow, by no means is it in decline, but I think the impact of the slowing is what has affected the fall,'' she said.

Rental agent Heather Bottelli of the Property Group said she has noticed a fall in the number of people actually needing accommodation.

"I think that fewer people are coming onto the Island,'' she said, "I am not seeing the volume of people that we had been accustomed to.

"Most clients now will not pay over $10,000 a month,'' she said "but in previous years it was common to see rents of over $12,000 a month.'' Ms Bottelli said reductions were most significant when compared with rates seen five years ago.

She also said she believed that some of the exempt companies had reduced their housing allowances and felt that this was impacting how much high-end renters are willing to pay.

But a quick survey of the largest reinsurance companies did not completely support her view.

Gavin Arton, senior vice president of XL Ltd. said housing allowances for XL executives have been fixed.

"They've been fixed,'' he said. "They're not going down and they won't for at least another two or three years.

"A lot of our executives do not get their full rent paid through their housing allowance anyway,'' he added. "Many people spend a few thousand extra to get the house that they desire.'' But Mr. Arton admitted changes in the payroll tax of the last budget were influencing housing allowances.

"There is a clear linkage between our capping the housing allowance and our desire to contain costs,'' he said.

"Our profits over the past few years have been more constrained,'' he added, "and all areas of expenditure have been reviewed including housing allowance and compensation in general.'' PartnerRe human resources director Diana Wilson said the company had not made any "major decisions'' on housing allowance reductions, but noted several businesses were "struggling with a balancing act'' in respect of payroll tax and whether they should claim some of it back from the employees and how that might affect pay increases.

Centre Solutions vice president George Hutchings said most of his executives are Bermudian.

"We are not a high user of expat workers,'' he said, " we prefer to hire Bermudians.

"We do not have a significant amount of people on housing allowance and offer a complete package,'' he added. "You either take it or turn it down. Housing is not an integral part of the package and is not broken out as a separate cost.

"I believe there is only one person here who gets a housing allowance,'' he said.

BUSINESS BUC