Real estate sales were down for 2008, but the average price of properties sold was up on last year to $1.64 million, according to the latest report by Rego Sotheby's International Realty, The Royal Gazette can reveal.

The estate agent's 'Real Estate Year in Review' publication reveals that Government statistics show a 25 percent decrease in Island-wide transactions from 2007 to 2008.

But the report, which was put together by Mary-Claire Havas, vice-president of sales and marketing at Rego Sotheby's International Realty and Daina Outerbridge, rental associate at Rego Realtors, also discloses that the average sale price rose slightly from $1.59 million to $1.64 million.

Meanwhile there was almost double the inventory of residential rental properties available on the market by the end of September and early October compared to the previous year as people waited to see what would happen as a result of the fall-out from the financial turmoil, but then picked up with falling rental rates, before evening out at the end of the year.

The report found that in light of the current economic crisis, the drop in house sales was no big surprise and predicted that the gap would be reduced as the remaining 2008 real estate closings were reported to Government.

It also reported that the number of free-standing homes sold decreased by 19 percent from 2007, while the condo market saw a decline of about 30 percent in the number of properties that transferred ownership, however the average sale price stayed quite constant in the mid $900,000's, again with remaining 2008 numbers yet to be fully registered.

On the residential rental side, the report concluded that the first half of 2008 continued the 2007 trend of a strong market, with a big demand in housing keeping prices high, but following the natural seasonal slowdown in the summer and the impact of the economic crisis around September/October, rental inventory began to move again due to declining rates.

Last autumn saw a slowdown in new residential arrivals in Bermuda. However, the actual activity in the market remained strong as existing residents began exploring a wider range of options as lease expiration dates began to close in, with tenants looking more closely at other housing alternatives and comparing value for their rental dollars, according to the report.

Landlords were showing willingness at the end of lease terms to renegotiate rents of current good tenants rather than lose them and risk not being able to replace them, and by end of December, there was steady activity throughout the rental market with inventory tightening up.