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Govt announces 100% financing for condos

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Government yesterday announced that first time home buyers will be able to purchase a Grand Atlantic condominium with no money down.

The 100 percent financing deal has been worked out in partnership with Butterfield Bank, Public Works Minister Michael Weeks said.

The United Bermuda Party immediately expressed concern at the news that 100 percent financing was being offered in “an already saturated buyers market” and that a better move would be to convert the condos into tourist accommodations.

The condos have not attracted any buyers since ground was broken a year and a half ago.

And a planned hotel attached to the project “would be considered once all the units are done,” said Mr Weeks.

Asked whether there were any concerns that payments for 100 percent mortgages may become unaffordable for the purchasers, Minister Weeks indicated that due diligence had been done by the bank and the Bermuda Housing Corporation and “if any difficulties arise, I’m sure we’d be able to address them”.

The three phase Warwick South Shore development, when completed, will consist of 60 two bedroom/one bathroom homes and 18 three bedroom/two bathroom.

The first phase, of 24 units, has been completed and another 27 units will be delivered in the summer, while the final 27 units will be delivered in 2013.

Prices range from $495,000 for a two bedroom to $665,000 for a three bedroom with an alternative energy component.

The Bermuda Housing Corporation is acting as intermediary for interested parties.

BHC Manager Major Barrett Dill said that there were no stringent conditions attached to purchase of the condos.

“They are in pristine surroundings and we do expect that people who move in will stay in,” he said.

But Kim Swan of the UBP said that Government will be better off converting the condos into long term rental tourism accommodations.

“We called into question the hurried development of this pristine ocean front property which is best suited to advance Bermuda’s tourism product,” he said in a statement issued shortly after Mr Weeks’ press conference.

“Once again property earmarked for hotel development is being sold off as residential without a hotel development in sight.

“It is noteworthy that prior to the 2008 recession numerous Bermudians purchased homes with little equity, but that also came back to haunt many families, with depreciated property values together with the drying up of property values when the International Business sector down sized in Bermuda.”

Mr Swan said: “We are concerned that the Progressive Labour Party Government’s actions could adversely influence an already depressed real estate market. This at a time when Bermuda desperately could use more hotel beds rather than condos for sale.”

Mr Swan noted that entry level government homes often become out of reach when resold.

The United Bermuda Party have long supported and built homes designed for entry level homeowners.

Our concern is that entry level government homes have often become out of reach when they are resold, and questioned whether potential entry level homeowners will be able to afford the 100 percent mortgages.

“Most potential purchasers for entry level home ownership are hanging on by a thread,” he said.

Michael Weeks, Minister of Public Works during a press conference to announce the financing terms for the Grand Atlantic Development. He then toured of some of the finished units. ( Photo by Glenn Tucker )
The interior of one of the units at the Grand Atlantic development.
The interior of one of the units at the Grand Atlantic development.
The interior of one of the units at the Grand Atlantic development.

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Published March 13, 2012 at 10:00 am (Updated March 13, 2012 at 10:03 am)

Govt announces 100% financing for condos

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