The value and volume of sold luxury homes were down 50 percent in 2009 compared to 2008, according to the latest figures by Coldwell<\p>Banker Bermuda Realty.

The report also flagged up serious concerns about the barriers to entering the Island's luxury real estate market for wealthy overseas buyers, including alien licence fees of 25 percent (equivalent to $2.5 million on a $10 million sale) and said Bermuda should be looking at ways of embracing those buyers at the same time as building its tax base.

The Luxury Home Market Update for January 2010 published by company president Brian Madeiros estimated sales of less than $30 million in the sector last year, though the realtor was aware of a couple of pending contracts which would close during the first quarter of 2010, equating to sales proceeds of approximately $11 million.

But the report found that free-standing luxury home inventory on the market for sale and available to overseas buyers increased marginally during the last quarter of 2009, worth approximately 18 homes with a total value of $175 million.

And despite demand from overseas buyers fell off last year, there were signs that market was bouncing back with a number of real estate agents re porting to have interested parties who qualify looking for luxury homes in Bermuda.

Bermudians, meanwhile, accounted for 33 percent of luxury homes purchased, down from 75 percent four years earlier, as per the report.

The report urged a reconsideration of the alien licence fee that was a deterrent to overseas buyers.

"Interestingly, the annual expenditure to maintain these very large homes in Bermuda benefits our employment base," the report read.

"Perhaps we need to revisit what Bermuda's long-term objective is with regard to whether we wish affluent buyers from the international community to be investing in our tax base, infrastructure and community through our luxury home real estate market.

"A number of overseas buyers continue to express frustration that much of our stand-alone inventory is antiquated and needs significant refurbishment, however, many potential buyers are unwilling to enter into protracted architectural planning and construction processes in order to create a home which will ultimately meet their requirements.

"Unfortunately, the supply chain specifically at the luxury home end of the market was onerously impacted when Bermudian developers were no longer permitted to buy large homes on speculation, redevelop and sell them to very high net worth individuals, many of whom were overseas buyers and willing to pay significant entry costs to participate in this market sector."