Low housing stock drives rents through the roof
There is an “absolutely huge” crisis in the rental market in Bermuda at all levels, according to Bermuda’s realtors, with record lows in rental units for medium and low-cost renters.
That means Bermuda’s pricey residential rents are being driven even higher, squeezing those at the bottom of the market.
It is one of the reasons for the desperate attempts by the Government to generate interest in North East Hamilton and other parts of the City — and other parts of the island — for residential developments.
This is widely evidenced in the recently released Economic Development Strategy 2023-2027.
The report, discussed during Friday’s sitting of the House of Assembly, noted “the acute housing shortage”.
Natasha Thomas, of Team Thomas at Keller Williams, said the rental market continues a trend of very high demand and decreasing inventory, particularly for one-bedroom apartments.
She said: “Property Skipperreports near historic low ranges of 45 to 49 apartments per month advertised in Q2.
“Recent trends would suggest rental rate increases in the market will continue through Q3, as active construction of new units remains limited, in relation both to local and international demand.
“Agents are finding their value to landlords increase, with the need to find and prepare just the right match of quality tenants.”
She is not alone. Ben Rego, sales agent manager at Rego Sothebys, said apartment hunting has become truly difficult.
He said: “There are 46 properties on the market for rent on the entire island.
“That is for every single real estate company, and for everything from a one-bedroom to a $20,000-a-month rental. In past years, there have been well over 100. ”
He surmised there were a number of factors behind this. “You have more people in Bermuda. Also, a lot of people have turned their rentals into full Airbnbs.”
He said some Bermudians were using their rental properties for the assessment number.
That takes them out of the rental pool, but it affords the opportunity for a second car in the household.
“Rental prices are probably up about 30 per cent,” Mr Rego said.
He said things were particularly difficult for people looking to rent who have pets.
“It is really sad,” he said.
In the past, landlords were more open to pets but now, holding all the cards, they can pick and choose what tenants they want.
Many landlords are saying: “No pets” owing to concerns over damage and noise.
“People with pets are absolutely struggling to find anywhere to take them,” Mr Rego said.
One woman, who did not wish to be named, said she tried for six months to find an apartment to rent.
“In my mind I am an ideal tenant,” she said. “I am in my early 40s. I have a good job and my dog is medium-sized and non-shedding. I was willing to pay for my own fencing, if that was needed. Sometimes pets damage properties, but that is what the cleaning deposit is for.”
She looked at 15 to 20 different apartments, in the $3,000-to-$7,500 range.
“Previously, I had owned my own property so it was never a problem,” she said. “But then I sold it.”
It was such a struggle that she considered buying her own property again.
“I would never leave my dog,” she said.
In the end, she moved in with someone who already had a dog.
“I was lucky to be able to do that,” she said.
She thought real estate agents were as much to blame as the landlords.
“They tell you no pets; no exceptions,” she said. “They had zero interest in having a conversation. The landlords have a choice on who they put in there, but it is the real estate agents who do the filtering.”
Like Mr Rego, she also thought the rising prevalence of Airbnbs were also contributing to the problem.
“Airbnbs really took a lot of properties off the market,” she said.
Some property owners have a different perspective. Many believe there is an imbalance in rights granted to tenants, often leaving the property owners in a bind and out-of-pocket.
A homeowner who did not want to be identified conceded that she has to be very selective with rental tenants.
“Renting to someone opens a door that is hard to close again when things go wrong,” she said. The wrong tenant can ruin an apartment.
“The Rent Commissioner can prevent the landlord from getting a bad tenant out,” she said. “Then there is court costs and so on, only to have to renovate the premises yet again to have it habitable for the next prospect.”
Impacted by housing? Write to email@example.com
Real estate activities
• Support the expansion of residential dwellings in Economic Empowerment Zones
• Expand the eligibility for Approved Residential Schemes from solely the Economic Empowerment Zones to the entire City of Hamilton
• Increase inventory of public affordable housing
• Encourage and support housing developments in residential zones highlighted in the Bermuda Plan and other geographical area specific plans
• Continue to support and facilitate schemes that promote new home ownership