Realtors hoping for post-election uptick in property market
Realtors are looking for the election result to slow the downward spiral of home prices in Bermuda and boost business confidence.
Coldwell Banker Bermuda Realty president Brian Madeiros said if just half the vacant office space in Hamilton was filled in the next year due to possible immediate policy changes by the new Government it could mean the creation of 2,000 jobs.
John Sinclair of Sinclair Realty said the OBA victory “will be pivotal” for Bermuda’s real estate industry though only time will tell whether the new Government’s policies translate into a more fluid market.
And also reacting to the OBA victory, Albert Moura of Moura & Associates said there were a number of potential buyers sitting on the sidelines waiting for the outcome of the election, some of whom were preapproved or in a cash position.
“I expect some of these potential buyers to now become active in the market and overall activity to pick up early in the New Year,” Mr Moura said.
His sentiments were shared by a number of individual realtors we spoke to.
“Real estate values have come down considerably since their peak in 2007 to 08,” Mr Moura said. “Consumer confidence is key to starting the turnaround, for those that support the OBA and its platform and believe they can deliver, the election result was the boost in confidence they needed.
“In the short term the increased activity will slow the downward spiral of real estate values and hopefully firm them up sometime before the end of 2013. I would not expect any upward pressure on property values until we see our economy moving in a positive direction.”
Mr Madeiros said that during the economic decline “local businesses had to strategically reassess business models in order to ensure long term financial sustainability or even survival, which in many instances resulted in the inevitable shrinkage of employment opportunities for Bermudians and a reduction in physical infrastructure and accommodation”.
He continued: “Quite simply consumer or transactional demand for goods and services provided by local companies continued to erode quite noticeably as both Bermudians and our overseas guests transitioned to other countries.”
Mr Madeiros said there was in excess of 600,000 square feet of vacant office accommodation in the City of Hamilton.
“If the new Government focuses on immediate policy changes resulting in the occupation of at least say 50 percent of the vacant office accommodation in the next 12 to 18 months this would mean the creation of an additional 2000 jobs and hence 2000 new consumers in our local marketplace,” Mr Madeiros said.
“Not only will these new job holders require rental accommodation, which the market can very easily absorb at this juncture, they will provide our local service providers with a much-needed boost in terms of consumption, whether it be retail, construction, restaurant or transportation.
“It is commonly understood that it is Government’s responsibility to provide the necessary framework through legislation and policy within which the private sector can ultimately grow their businesses, which at the same time creates new employment for Bermudians.
“At present, the real estate market has an excess supply of commercial and residential accommodation. New occupational demand, prudently managed and created through policy change can be readily absorbed without any significant pressure on either residential or commercial pricing as it relates to the real estate market.”
He added: “Perhaps our lending institutions may have more of an appetite for lending through their mortgage products if they see a growing economy.”
John Sinclair of Sinclair Realty, exclusive affiliate of Christie’s, says “there’s perception and there’s reality”.
The Royal Gazette: “Regardless of outcome, the simple fact that the election is now behind us shifts the Island from a period of stasis to one of movement.
“Movement begets confidence. I have no doubt the OBA victory will be pivotal for Bermuda’s real estate industry. But it can only be measured with the passage of time whether or not the OBA approach to policy — upon which Bermuda real estate is fully dependent, actually translates into a more fluid market environment.
“Yes, we’re a local community; but the reality is we are also in the global arena. It is onerous on the new government to carefully examine the policies impacting property ownership and to determine whether or not they are serving the long-term interest of Bermudians and Bermuda.“
Buddy Rego, of Rego Realtors, said he was also hoping for policy “that encourages turnover in the marketplace” and creates “attractiveness to PRC holders and international buyers so that we can earn much needed foreign exchange and stamp duty income for Government”.
He said he would comment in more depth next week.