Buying real estate in Bermuda remains one of the best investments to be made on the Island despite the steep increase in property prices during the past seven years.

That is the assessment of Coldwell Banker Bermuda Realty, which the company backs up with an analysis of the property market since 1995.

In the years from 1995 to 1999 the local property market remained fairly stable in terms of units sold, this was due to high interest rates that touched 9.5 percent and mortgage lenders requiring deposits of between 25 and 30 percent.

"These two factors alone prevented many hopeful homeowners from removing themselves from the rental pool," said Susan Thompson, of Coldwell Banker. Things changed in 2000 when the North America housing boom, a growth in international business in Bermuda and falling interest rates all combined to boost demand within the Island's property market.

The increase in house prices during the past decade is reflected in the movement of the "mean price" — lining up all property prices from cheapest to dearest in a line and then locating the median (middle) price.

In 1998 the mean price was $345,000, in 2006 it had risen to $875,000. Over the same period the average property price rose from $590,000 to $1,147,000.

Mrs Thompson said: "Real estate in Bermuda is still one of the best investment deals that you can make. It is consistent year after year and that is what these figures show. This is good news for property owners and new purchasers alike. Other good news is that more and more people in Bermuda are able to own their own property, contrary to what we may be bombarded with in the media.

"From 1999 to 2001 the number of units sold increased by 59 percent in Bermuda, which translates to a higher ownership rate. Following an initial dip in 2002, these rates have continued to climb incrementally year over year and are higher than historically recorded if you look at the entire period."

Analysis by Coldwell Banker shows the luxury property market spiked in 1998 and 2005 with total sales topping $80 million in both years. The most recent figures from 2006 show that market fell back to $60 million last year.

There is also evidence to the continuing strength of the condo market, which saw a boom starting in 2003 after a busy spell of land transactions heralded a spell of condo-building and a subsequent increase in the quantity of condos available.

In her market analysis Mrs Thompson said: "Buyers often question whether the purchase of a leasehold property is a wise choice given the number of condominiums now available on the market. The number speak for themselves. There has been a steady increase in pricing of condos throughout our 10-year study with noted increase since 2000."