A LEADING realtor yesterday said she had not seen so many homes available on the Bermuda housing market in ten years as there are now.

Susan Thompson, agency manager at Coldwell Banker Bermuda Realty, has noted a "glut" of condos available which has even persuaded some developers to drop their prices.

It was not that people could not afford available properties, Ms Thompson said, rather it was a case of people waiting for a downward move in the market.

Her comments followed the confirmation in a major international survey that the island has one of the world's most expensive housing markets .

The annual Home Price Comparison Index, carried out by international realtor Coldwell Banker, found that Bermuda was second only behind Milan in the company's ranking of markets outside the US.

The company found that a typical four-bedroom home in Bermuda would cost $1.44 million, a little more than in Paris or Dublin and nearly $200,000 more than in Rome.

"I think there is a shortage of people willing to pay the prices being asked because there is a larger inventory at the moment," Ms Thompson said yesterday.

"I think people are waiting and hanging onto their money to see if there will be any adjustment in prices.

"A couple of years ago, there was so little available that people were feeling pressured to make offers. Now people are taking their time and taking a look at maybe six or ten properties."

She added that rising interest rates over the past year or so, which had significantly increased mortgage payments, had also encouraged potential buyers to bide their time before making a commitment.

"The inventory is the highest I have seen in ten years and a good two-thirds of what is available is in the condominium sector," Ms Thompson said.

"There is a large glut of condos at this time and people are going to have to look at changing their prices.

"We have seen developers put their condos on the market at one price and a few months later, drop that price."

However, she did not believe that the emergence of this trend signalled any likely significant future decrease in real estate values, like that witnessed in the US.

"Typically, at the top of people's wish list is a three-bedroom house on a quarter-acre with an apartment, in a central parish," Ms Thompson said.

"We are not going to see a fall in prices of that kind of property. I think sellers of those places will have no problem in getting what they ask for, providing they don't overprice it, of course."

Such properties were particularly popular, because most would allow room to build on an apartment to be rented out to help offset the cost of the mortgage, she said.

Most of the homes currently being sold on the local market are in the $850,000 to $1.5 million range.

"Above $1.5 million, there are fewer people qualified to meet the cost and so it's more difficult to find buyers," Ms Thompson said. "You will normally find buyers for properties under $850,000, but they may be first-time buyers who are having difficulty making the downpayment."

But the oversupply of condos has apparently done no damage to the rental market.

"A few years ago, we had a lot of older inventory available in rental and a lot of landlords were not able to get the rents they wanted because people wanted the newer places, so many landlords improved those properties," Ms Thompson said.

"Now we have the opposite situation, because we have a huge inventory of property for sale and a very small inventory for rent. So the rental market is very buoyant right now."

In the Coldwell Banker international survey, the island proved cheaper than just four of the surveyed US markets, all in wealthy areas of California ? Beverly Hills ($1.8 million), Santa Monica ($1.76 million), La Jolla ($1.76 million) and Santa Barbara ($1.7 million).

The survey covered 384 housing markets where Coldwell Banker has offices. Expensive locations London and Tokyo are not included in the survey, as the realtor does not operate in those cities. And Manhattan is also left out, as apartments, rather than single-family homes, dominate its market.

The cheapest places to buy the 2,200-square-foot feature home were Bogota, Colombia, where it would cost $56,522, and Beijing in China ($63,994).

Ms Thompson was not surprised at Bermuda's high ranking.

"You have to look at Bermuda as a unique case," she said. "When you live in a sub-tropical climate, a strong economy and a limited landmass, situated close to the US, then it's not surprising that property prices are high."

And those basic factors underpinned the security of real estate as a solid investment on the island, she added.

"You almost can't go wrong," Ms Thompson said. "Real estate in Bermuda ? bought in a decent area at the right price ? will always retain its value, because of the limited supply of land and the fact that there will always be people who need housing."