The Bermuda Chamber of Commerce has reacted strongly to comments made by Progressive Labour Party backbencher Derrick Burgess in the House of Assembly last Friday regarding soaring house prices in Bermuda.

Mr. Burgess blamed inflated prices and rentals for Bermuda properties on Coldwell Banker, the international real estate franchise.

He said that introducing Coldwell Banker's business practices here had led to higher prices being promoted so that agents could "make greater commissions."

Mr. Burgess added that if Bermudian college graduates and professionals cannot afford to purchase homes here they will go abroad to buy more affordable houses and that as a consequence Bermuda will suffer a "brain drain".

He also said that "the public should be made aware of how the real estate agents are driving up the prices of housing, with Coldwell Banker leading the way."

Responding in a written statement, the Chamber of Commerce sought to challenge Mr. Burgess's comments, saying that "there were some issues that require clarification in respect of real estate transactions and the role of agents."

The Chamber said that the role of real estate agents is to facilitate the sale of property, with the agent representing the vendor unless by special arrangement to the contrary.

"This business is conducted by Bermudians for Bermudian-owned properties, by law. Agents can provide valuable information regarding comparable sales and market trends. Agents can and do recommend a price at which to market a property. Vendors frequently have their own ideas as to the value of their property and that value is often higher than an agent might suggest. Setting prices is not an exact science."

They added that ultimately the contract for the sale is between the buyer and the vendor, and both parties are strongly advised to be represented by lawyers at closing.

"The vendor has the final decision on what amount will be accepted. The purchaser decides on his willingness to pay that price."

The statement said that agents put the parties together and facilitate the transaction,"but not without the experienced involvement of members of (the) legal and financial professions; the bankers and lawyers ensure proper financial decisions are made and legal obligations are met" by both the buyer and the vendor.

The Chamber stressed in their statement that sale and rental prices are determined by the market "and while no-one can deny the increase in prices over the years, the market is driven by supply and demand."

They added that other economic factors driving higher real estate prices include higher salaries; availability of funds and record low interest rates; and lower returns overall on other investment vehicles.

The Chamber also came to the vigourous defence of local real estate agents, saying that: "Agents work hard to earn a living and charge the same percentage for their commissions no matter what price or rent is paid. There are many more small transactions than large and often more work for the smaller ones. To lay the blame for the woes of Bermuda's current real estate market solely at the feet of agents is simply wrong."