Far more than the fate of one incredibly expensive house rests on the outcome of the GoldenEye case according to critics of the government policy.

They claim the ban on Bermudians selling top-class homes to foreigners has driven wealthy buyers away, lost the government millions of dollars, and done nothing to address homelessness.

GoldenEye's owners argued during the Supreme Court case that the most expensive homes on the Island, such as theirs, are now un-sellable as Bermudians cannot afford to buy them.

The government still allows non-Bermudians to sell their luxury homes to foreigners as long as they have an Annual Rental Value of more than $153,000. Around 350 properties on the Island fall into this bracket although the Land Valuation Department does not list how many are owned by Bermudians.

The lawyer acting for Mr. Alan and Mrs. Vera Marshall, Saul Froomkin QC, branded the policy "clearly discriminatory" to Bermudians and questioned its wisdom.

He told the court that the government would have netted more than $9 million in taxes and fees if GoldenEye had been sold for $35 million to a foreigner prior to the ban.

Announcing the policy last February, Home Affairs minister Randy Horton said the crackdown on property sales to foreigners would "turn off the tap" of land being sold to foreigners, and help address the housing crisis.

"This may be hard for those who have made a lucrative career in the business of selling to non-Bermudians; however, this is one issue where the Government must make a stand. It is imperative that the people of this country are given an opportunity to have land ownership in the country of their birth," he said at the time.

The ban also aimed to address the problem of "fronting." This was occurring, according to the minister, where non-Bermudians were acquiring residential, commercial and undeveloped land using Bermudian individuals and trusts as 'fronts'.

"The intrusion of non-Bermudians into the protected local real estate market is one of the factors that have driven the price of even modest properties beyond the reach of all but the wealthiest Bermudians," said Mr. Horton.

However, according to two industry experts, the policy was ill-thought-out and has had a damaging effect.

"It's ludicrous that we should be talking about preserving 'Billionaires' Row' for future generations when we have land that we could almost certainly use," said Buddy Rego, president of Rego Sotheby's International Realty. "The fact of the matter is that the land we are talking about is not the land that the homeless are likely to end up living on."

Mr. Rego estimates that around 20 high-end properties were taken off the market soon after the new policy was implemented, due to lack of local interest.

Each sale of a home at more than $1.5 million nets the treasury six percent of the purchase price in stamp duty plus the 22 percent licence fee the foreign buyer has to pay, he explained.

"If you take 20 properties at an average price of $4.5 million you could call it a $20 million loss although you don't know that all of those properties would necessarily have been sold to non-Bermudians" he said. Market analysis shows that over the past five years Bermudians have been increasingly willing to snap up all but the priciest homes on the island, often buying them back from foreign owners.

However, those at the very top-end of the market, in the $6 million plus price bracket, have been the ones affected by the policy change as these have never been attractive to local buyers, said Mr. Rego.

"Where this policy has gone wrong is that it has taken those homes that were typically not being bought by Bermudians out of anyone's reach. There are a number of properties that have come off the market. They have become virtually un-sellable as Bermudians are not buying at the upper end of the market," he said.

"Where there were on average 25-30 properties on the market at one time that could be sold to non-Bermudians, there are only 12 at the present time. How is that affecting the Treasury?"

He added: "Some non-Bermudians have voiced concern that the policy could one day be applicable to them and the other concern is that overseas buyers now do not have the same choice.

"Nowhere in the Caribbean is as prohibitive to overseas buyers as Bermuda. What the prior policy and the existing rules do is make other jurisdictions much more attractive and we have heard that first hand from interested individuals."

Brian Madeiros, president of Coldwell Banker Bermuda Realty, said that market intelligence indicated that 16 homes with ARVs meeting the threshold for non-Bermudian purchase had been sold in 2005 equating to around $80 million, not including the Tucker's Point development.

"Approximately 75 percent involved Bermudian buyers. St. George's parish saw the most activity with five sales transactions, all located in the Tucker's Town area," he wrote in a recent market update.

However, he expressed concern that the February 2005 policy change may damage the Island's ability to attract wealthy overseas buyers and forecast clouds on the horizon.

"After the change the inventory available to overseas buyers over five million dollars dropped from 20 to 7. As of the end of 2005, wealthy overseas buyers looking at acquiring large homes in the very top end of our residential market have a choice of 12 freestanding homes. By comparison, the islands to our south offer buyers significantly more choice and fewer entry barriers," he said.

"Although last year was a tremendous year for the very upper end of our residential market, the actual number of overseas buyers looking at property during the last quarter of 2005 were few and far between, and the prediction for the first two quarters of 2006 with respect to overseas buyers appears to be fair to partly cloudy," he said.

And Deputy UBP Leader Michael Dunkley said his party sympathised with the concerns of real estate agents.

"This shows that the PLP has made another policy change that has not been well thought-out. When you are going to make a policy change like this you would have thought that the Minister would ask everyone involved for feedback but clearly that did not happen," he said.

Mr. Horton told The Royal Gazette that he firmly stood behind the policy, and said he had acted "in the interests of every single Bermudian in the country." However, he declined to discuss the issue further until the outcome of the GoldenEye case is known.