Stubbs: property market need banks to lend
Bermuda's struggling real estate market will only recover if the island's banks begin lending again, an economist told a construction and trades industry conference.
Robert Stubbs, who is head of research at think tank Seed Bermuda, was speaking on a panel at “2020 Vision: Straight Up. No Chaser”, presented by recruitment and immigration consultancy firm The Catalyst Group.
“Bermudians are not buying real estate, because banks are not lending money,” said Mr Stubbs, formerly the head of research at Bank of Bermuda.
“Sixty per cent of Bermudian sales in the last 12 months were in cash. The banks are not lending, we have to get them lending again.”
Bermuda recorded approximately 200 real estate transactions in 2019, a level of activity that mirrored results in 2012, which real estate agency boss Brian Madeiros of Coldwell Banker Bermuda Realty has called “the worst-performing year in recent recorded history”.
He said a regularised market in Bermuda that doesn't price people out should produce 450 sales transactions annually.
Penny MacIntyre, a partner at Rego Sotheby's International Realty, also spoke on the panel. She was among several realtors who recently called on the Government to allow work permit holders to buy condominiums in Bermuda.
She told conference attendees that real estate values have dropped by 30 to 40 per cent.
“We are in year three of a consecutive decline in all real estate sectors”, Ms MacIntyre said.
“Where we are now, from 2017 to 2018 to 2019 and now as we start 2020, is a detrimental space to be in.
“For people here who hold real estate, it is their most valuable asset and their retirement money, but we don't have a robust economy, a buying base.
“We don't have enough people to fill the rental properties on a long-term basis, or to buy because of confidence levels.”