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Surging demand brings pressure to housing market

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Real estate agent Adam Birch’s voicemail fills up with calls from people desperate for housing, on a daily basis

A lack of inventory means there will be little immediate impact from changes to Hamilton real estate purchasing rules, says a veteran real estate agent.

“Normally, in the city there are one or two (condominium) units for sale among the Atlantis, 6 Dundonald Street and 10 Dundonald Street,” Adam Birch, of Coldwell Banker Bermuda Realty, told The Royal Gazette.

“There is just not much available for sale right now. However, this might encourage developers to build more city apartments if they know there will be an increase in demand from the segment.”

The new legislation allows people without Bermudian status under immigration law, to buy residential units in Hamilton, for the next four years.

The changes aim to encourage investment in residential developments in the city beyond the Economic Empowerment Zone.

Mr Birch said demand for residential units, to buy or rent, is sky-high across the island.

He estimated there are 50 properties available for rent in Bermuda at present.

Over the course of 20 years at Coldwell, Mr Birch has seen dramatic shifts in the local real estate market.

Back in 2018, some 35 people viewed a house he was selling in Smith’s, over the course of two years.

“A few months ago, I had 45 people look at a similar property in the same parish, over a three-day period,” he said. “I had five good offers, and eventually sold it for $1.1 million.”

Any property advertised for rent online, is quickly snatched up.

“If I put a listing up for a rental online, right now, I would probably take it down after an hour,” he said. “I would probably get 50 to 100 people reaching out. The sad part is that they are all good tenants. It is a bummer telling people they did not make the cut.”

Landlords can pick from the pile, at random.

In the early days of Mr Birch’s career there was a lot of activity in the market. Then the bottom started to drop out after the mortgage crisis in the United States in 2008.

Hundreds of expatriates left Bermuda due to changes in their employment circumstances.

“It wasn’t until 2009 and 2010 that I noticed I was having to work much harder to sell or rent a property,” Mr Birch said.

Things became so slow that he left real estate completely for two years to work as a bartender. He came back into it slowly, and is now full-time again.

“Every day my voicemail fills up with people looking for housing, especially on the lower end of the scale,” he said. “I get about four or five calls a day. I feel genuinely bad for people. There are a lot of families out there struggling to find somewhere to live with their kids.”

He said it was upsetting to see the stress on families.

“Some of them have good jobs and are looking for one or two bedroom apartments,” he said. “There’s just not much inventory out there.”

He said it is also tough for new people moving to the island.

“Five years ago, I would show them six or seven places and they would go home and make a decision,” he said. “Now, I often have just one place to show them and they have to make a decision pretty quickly.”

He thought Airbnb rentals were contributing to the issue.

“In 2017, there were around 200 Airbnb rentals,” he said.

Now there are around 500.

“There are a variety of factors behind the current market situation,” he said. “The sales market is picking up and more people are moving back into their homes and then doing renovations. There is less fluidity in the market.”

He said renters used to move around a lot as they searched for a better place with better rent.

“Now, if they have a semi-decent rent, they are staying put,” he said.

6 Dundonald Street, Hamilton, condominiums (File photograph)
10 Dundonald Street, Hamilton, condominiums (File photograph)

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Published May 14, 2024 at 7:45 am (Updated May 15, 2024 at 8:12 am)

Surging demand brings pressure to housing market

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