Bermuda’s property market rebounded strongly in 2021, a report by Rego Sotheby’s International Realty reveals (see related media).

The agency said increased average selling prices were the norm last year across all sectors.

Non-luxury residential properties saw a 17 per cent increase with an average sale price of $1.023 million while condominiums with an ARV under $25,800 enjoyed a 30 per cent increase in average sale price to $322,000.

The average sale price of luxury residential properties increased over the previous year to $6 million.

The market average sales price of land increased to more than $1 million compared with $331,000 in 2020.

A significant contributor was the introduction of estate lots at Riddell’s Bay, the agency said.

A scarcity of available rental properties resulted in higher rental values.

All categories from one-bedroom apartments and cottages to family and executive homes have seen a resurgence in demand from both long-term and short-term tenants.

Rego SIR said work from Bermuda entrants to the market have depleted the short-term market inventory and taken up some of the long-term rental and sale properties.

The average price of four-plus bedroom family homes grew 56 per cent year over year, while larger four-plus bed condominiums had the highest price increase of 79 per cent.

Following the trend that began in 2020, there was high demand for Class A commercial rental spaces.

With Point House fully let and minimal inventory at the Waterfront Complex, the capacity to accommodate tenants at this end of the scale is dwindling, Rego SIR said.

Class A rentals range from $50 to $90 per square foot depending on a variety of factors such as location, views, amenities, age of building and parking.

In addition to the square foot rental cost, Class A buildings often have higher service charges ranging from $15 to $25 per square foot, and these do not necessarily include electricity, Corporation of Hamilton tax and Bermuda Government land tax, Rego SIR said.

The agency said the Class A market is dominated by insurance, reinsurance, hedge funds, financial institutions and law firms both existing and new-to-island.

Inventory in the Class B market remains largely available, with rentals in this bracket on the market for upwards of one year.

Class B rental rates range from the mid $20s to high $30s per square foot, and service charges range from $8 to $12 per square foot.

These buildings are not usually in the central business district, Rego SIR said, and may not have all modern amenities such as elevators, generators and often do not offer water views or parking.

Most of the interest in these buildings came from the local market and firms that are not motivated by prime west Hamilton locations.

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The hotel tourism sector was very active last year as the remaining villas at The Loren at Pink Beach sold to international buyers.

The Loren Villas, St Regis Bermuda Residences and Azura Resort condos with their lock-off design and owner incentives proved attractive to investors and owner occupiers, the agency said.

As the year ended, internationally available condominium inventory dwindled to four physically ready units between St Regis Bermuda’s first phase and Azura.

St Regis Bermuda’s second phase of 15 residential condominiums under construction was nearly 47 per cent sold or reserved by year-end, the agency said.

There were six commercial sales in 2020 with market average sales pricing at approximately $1.3 million. There was a higher demand for warehouse/industrial buildings outside Hamilton reflected in the type of inventory that traded.

In comparison, there have been four commercial sales in 2021 recorded to date by the Land Title Registry Office with the average sale price approximately $1.23 million, the agency said.

The demographic of buyers includes Bermudians and those who will be owner occupiers.

Rego SIR represented three commercial sales last year including 26 Burnaby Street in Hamilton — previously the Bermuda Monetary Authority and Butterfield Bank private banking — and 93 Front Street in the city after a total of 141 days on market. The agency said another notable sale, in St George, was the 12,000-square-foot Somers Wharf building.

Prices per square foot varied widely from $135 to $370 depending on location, attributes, rental income or potential and existing building conditions.

This year, Rego SIR said, tenants and buyers will continue to seek out value when not able to acquire move-in ready accommodation in both commercial and residential property.

New renovated properties will dominate the transactional activity and unless more properties enter the market volume is likely to be subdued this year.

The agency said the health of Bermuda’s economy will depend hugely on the health of the island’s citizens this year and consequently the tourism industry.

The report concluded: “We will need all boats to rise with the tide this year if we are to survive the onslaught of quarantines, curfews and testing.”

Rego SIR said all sales figures are based on the latest report issued by the Land Title Registry Office at the beginning of the month. Some sales may not yet be recorded.