Realtors link high prices to lack of inventory
There is rising concern about the affordability of the Bermuda dream of home ownership.
There is some evidence of shortages explored in the next RG Business edition of the Navigate Series — a podcast that examines sectors that lead Bermuda’s economy.
The latest in the series focuses on real estate and the challenges faced by industry in today’s market. The new podcast comes online Monday.
But the real-estate issue was even raised on the floor of the House of Assembly last Friday.
It came as Jason Hayward, the Minister of Economy and Labour, expressed positive economic projections for the island, after meeting with local and international business leaders.
He said: “We collectively agree that the economy is on a good trajectory and we are not heading into a recession.”
But One Bermuda Alliance backbencher Michael Dunkley responded that the price of Bermuda real estate was becoming less and less affordable.
The former premier countered: “What about the opportunity for Bermudians to buy a first home?” He said: “The price of real estate in Bermuda is going up, and up, and up, and up. And it’s becoming less and less affordable.”
Mr Hayward rebutted: “One of the leading realtors was on TV this week talking about how robust the real-estate industry has been. Real estate is our second-largest sector within our economy.”
He was referring to a Bermuda Tonight interview with Brian Madeiros, the president and CEO of Coldwell Banker Bermuda Realty, who said that last year was the best year for commercial real-estate sales, with $35 million worth of commercial property sold.
It may be a case of then, and now.
In fact, realtors appear to be operating on the front lines of a housing shortage, navigating a market bereft of properties for sale or rent.
There is surging demand for residential rental properties, throughout the spectrum.
There is less inventory than there was pre-pandemic. So many people are eyeing new rentals that in some cases offers come in above the asking price.
Sallyann Smith Stratton, the managing director of The Property Group Ltd, said even the $5,000 to $10,000 rentals are lacking in inventory.
She said: “We are lacking in everything, really. A listing was posted recently for around $2,000 per month. But it was taken down quickly, as they immediately had over 40 inquiries.”
From low end to high end, the demand is there. Realtors agree there are a number of reasons why.
Couples are getting divorced and looking for separate accommodations; those who went home during the pandemic are now looking to move back on their own; there are a number of digital nomads on island, including those extending their stay; and there are companies bringing people in to work, including those arriving to staff new international companies since the latter part of last year.
Ms Smith Stratton said: “There is a mixture, but a lot of those looking are those who have moved here to work. Some have already been here, but are now looking to upgrade their rental.”
There is also pressure on the supply side, she said. “A lot of properties are now Airbnb, which has minimised the inventory.”
Meanwhile, there is also a comparative dearth of properties for sale.
One contributing factor may have been a by-product of government policy.
She observed: “One thing that has reduced the non-Bermudian market sales is that when Government brought in the new EIC programme, it removed some condos previously available for sale to non-Bermudians.
“The likes of developments like Mizzentop, Manor House, Hidden Cove, Mount Wyndham and many more are no longer available to overseas purchasers.”
“The only condos that are available to that market must have a hotel affiliated with the development. That would be St Regis, Tucker’s Point, The Loren and Azura.”
The point is central to a running disagreement between the Government and realtors, outlined by The Royal Gazette, last May.
But even beyond that, Ms Smith Stratton said there is a lack of high-end homes.
“We have tons of buyers and not much to sell,” she lamented. “It is a great time to sell and get a good price right now, while inventory is so low.”
Meanwhile, concerns about the face of Front Street and the amount of empty commercial space are also addressed during the next RG Business edition of the Navigate Series.
On Monday, Rego Sotheby's International Realty president Buddy Rego and partner Penny MacIntyre lay out the behind-the-scenes movement going on in the City and how it will be realised in the near future.
The episode delves into an industry undergoing change, during the discussion led by Navigate Series host Shivani Seth.
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