By Danny Sinopoli Flattened-out market prices and a glut in the number of total units has made housing a "poor investment'' in Bermuda, the general manager of the Bermuda Housing Corporation said yesterday.

"Buying a house is not a good economic proposition,'' Mr. Edwin Cowen told Hamilton Lions at the Princess Hotel. "I have been back (in Bermuda) for two years and I haven't seen a house that has gone up in value. But I've seen them come down. I think people buy them for their capital appreciation -- not because they will get a good return on their investment.'' Mr. Cowen, who worked as a real estate developer in the US and Caribbean before he took over at the quasi-autonomous housing body in 1992, claimed that the Island suffered in particular from an excess of the "wrong'' type of housing units.

What Bermuda really needed, the general manager said, are more affordable larger homes.

"We know that we have more total units than we really need and that's especially true of one or two-bedroom units,'' Mr. Cowen told The Royal Gazette after his speech.

"What we could use more of are three and four-bedroom units. They would better suit the needs of our current target group, which is the lower-income echelon. We have one and two-bedroom units coming out of our ears right now.'' Mr. Cowen, who cited the Island's low birth rate as another reason for the overall glut in units, said the prospect of an economic return was especially slim for those who bought houses to rent.

"As far as buying to rent is concerned, Bermuda is a poor investment,'' he said. "If you were going to buy to own, then you have a good capital investment. But if you're planning to rent a home, you're going to be lucky if you get a five-percent return. That's the reality of the current situation.'' Mr. Cowen, whose organisation also caters to housing needs of the elderly and homeless, said investors would only make a "decent return'' on upscale "executive-type'' homes and rental units in the $5,000-and-up range.

Opposed to Independence in the immediate future, he also suggested that Bermudians wait until after "the Hong Kong situation is resolved'' if they wanted to avoid even more uncertainty.

"Do I think the issue of Independence should have been raised at this time?'' Mr. Cowen asked. "Definitely not.'' Britain is scheduled to hand over the Asian colony to China in 1997.

Although Mr. Buddy Rego of the Chamber of Commerce's real estate division was unavailable for comment yesterday, Mrs. Hope Bowker of Hope B. Bowker Real Estate was infinitely more positive on the current housing situation, saying that sizable returns could be had in today's market if investors bought wisely and carefully.

"If you bought something 10 years ago and you're getting a whopping rent for it now, it's a good investment, isn't it?'' Mrs. Bowker told The Gazette .

"But if you bought something at the top of the market -- say in 1987 or 1988 -- then you won't be getting a good return on it overnight. It doesn't work that way.'' Mrs. Bowker added: "It depends largely on how you bought, when you bought and how much you paid for it. I know of sellers who have had tremendous returns. I myself have invested in property. In the long run, it's a good investment.''