Rents being asked for high-end properties have fallen by between 10 and 30 percent, as the number of people seeking such accommodation falls.

Buddy Rego, of Rego Sotheby's International Ltd., said properties in the $5,000-plus per month range had seen the most severe drop-off, although rents on properties further down the scale were holding up better.

"A decline of 30 percent has been seen in some instances — but only at the very highest level," Mr. Rego said. "I would not expect rents for one- or two-bedroom to have declined. But landlords who were previously receiving $20,000 a month for a luxury property are having to accept less now.

"Certainly there has been some attrition in the number of expatriates looking for properties. If you don't get a new inflow of expatriates, then you will see a depreciation in rental values."

Mr. Rego expected to see the real estate business slow down this year as the effects of the global economic downturn bite. But he suggested that now would be a good time to buy if you're looking at a long-term home — not so good if you're a speculative buyer.

"If you know you want to live in Bermuda and your dream home comes on the market, then now is as good a time to buy as any," Mr. Rego said. "If you look at fundamentals, then I'd rather be a buyer now. If I were a short-term seller, I'd be looking to hold."

Looking at the uncertain period ahead, Mr. Rego added: "In 2008, the average price of real estate sold was higher. The economic catastrophe occurred largely in the last quarter of last year and how that will translate into the market in 2009 remains to be seen.

"The biggest challenge that anyone in business has now is confidence. As soon as that component is reinstilled, we'll see the market move."

Rego Sotheby's is the biggest player in Bermuda's luxury market — defined as properties with an annual rental value of $153,000 or more. Foreigners can buy this category of property, but Bermudians had been the main buyers in this category in recent years, Mr. Rego said.

He said there were 13 luxury properties on the market at the moment — 85 percent of them listed with Rego Sotheby's.

"Turnover in this market has declined over the past number of years," Mr. Rego said. "From a Bermudian viewpoint, going back as far as ten years, Bermudians have increasingly been buying these properties. Over the past five years, 64 percent of these have been bought by Bermudians.

"I think that reflects the success Bermudians have enjoyed in the local workforce, as we've been made better off by the success of international business. What the next year will bring, no-one can be sure of."