Bermuda’s residential real estate market continues to hover around an average home price of $1 million, but the full picture is far more nuanced than a single number suggests.

“If you’re looking for a three-bedroom, two-bath house on a quarter-acre in one of the central parishes, in a good neighbourhood, in good condition, you are going to pay starting probably $1.3 million to $2 million,” explained Susan Thompson, agency manager at Coldwell Banker Bermuda.

Meanwhile, the market faces major challenges, primarily a severe inventory shortage. Ms Thompson noted that while official land title registry data suggests 204 properties sold in 2024, the actual number is likely closer to 300. This data lag is a persistent issue, with registry records typically running months or years behind.

Location dramatically impacts pricing, she said. “The same property in St George’s might sell for $850,000, but if you drop it in Devonshire, you’re probably looking at upwards of a million dollars,” she said.

The “sweet spot” for single-family homes, she said, remains between $1.05 million and $2.5 million, typically including an apartment.

Condos offer alternative options, with prices ranging from $500,000 for starter units to over $850,000 for luxury developments.

Bermuda’s residential real estate market has experienced extreme fluctuations over the past two decades, with average home prices and sales volumes reflecting broader economic trends.

In 2002, the average cost of a single-family home stood at approximately $870,000. By 2003, this figure had risen to nearly $1 million, driven by high demand and limited supply. The market continued its upward trajectory, reaching an average home price of around $1.6 million by 2007. However, the global financial crisis led to a downturn, with prices dropping by up to 30 per cent between 2008 and 2012.

Sales volumes have also varied. In 2001, Bermuda recorded approximately 650 real estate transactions, the highest in recent history. This number declined sharply in the following years, with about 200 transactions reported in 2012. The market began to recover in the mid-2010s, with increased activity in both the residential and commercial sectors.

The luxury segment has seen notable activity, with properties in areas like Tucker’s Town and Paget commanding premium prices. In 2013, the ultra high-end market saw listings ranging from $25 million to $45 million, reflecting the island’s appeal to high-net-worth individuals. However, these properties represent a small fraction of the overall market.

Today, the market is characterised by unique dynamics, said Ms Thompson. Approximately 50 per cent to 60 per cent of purchases are from “cash buyers”, meaning individuals not requiring bank financing. Construction costs have also escalated, ranging between $750 to $1,000 per square foot, driven by pandemic-related supply chain disruptions and labour shortages.

Ms Thompson highlighted an emerging concern: Bermuda's ageing population and lack of appropriate housing. “We are not set up to take care of our ageing population the way other jurisdictions are”, she warned, noting limited options for seniors seeking to downsize.

While new construction remains limited, the market continues to adapt. Ms Thompson advises potential buyers to think strategically: “Buying real estate is not for your lifetime. What you buy today may not fit you ten years down the road.”