The Tribune

A Bahamian realtor says he has “never seen such high rental rates” as now exist in some of western New Providence’s most upscale communities with demand in this segment now suppressing available-for-sale inventory.

John Christie, HG Christie’s president and managing broker, told Tribune Business that high net worth individuals were paying between $10,000-$14,000 per month to rent homes in areas such as Sandyport, while the rates in communities such as Lyford Cay and Old Fort Bay were reaching to $20,000-$30,000 per month.

Given such returns, he explained that residential property owners were increasingly electing to seek tenants rather than buyers for their real estate. The surging rental market is thus keeping the volume of properties for sale relatively low, especially after much available inventory was acquired in the post-COVID boom, with the result that prices are driven higher as buyer demand outstrips supply.

“Inventory is pretty low in places like Lyford Cay and Old Fort Bay,” Mr Christie told this newspaper. “There’s still an inventory in Ocean Club Estates and Albany. Albany still has some inventory in their condos, but it’s still pretty tight. There’s still demand outstripping supply right now. Who knows what will happen in the New Year, but it’s still pretty much status quo.

“There’s still more people coming in, especially people looking for rentals. People are getting very high rental prices, and that’s keeping prices high. That’s what’s keeping inventory low as well; persons renting rather than selling. I’ve never seen such high rental rates as people are getting now.

“People are paying $10,000, $12,000, $13,000, $14,000 a month in places like Sandyport. Places like Lyford Cay and Old Fort Bay, people are paying $20,000-$30,000 a month. The bigger houses, it’s $30,000.” Mr Christie said The Bahamas was increasingly attracting high net worth tenants, wanting to rent upscale properties for a year or two, for purposes such as pre-US immigration or to test whether they want to put down more permanent roots in this nation.

This, though, is also helping to reduce the amount of high-end property available for sale. The 35 condos and other real estate acquired by failed crypto currency exchange, FTX, for a collective $256m will take time to come on the market given that it will tied-up in the platform’s respective liquidation and bankruptcy proceedings.

“Usually there’s something to buy, and right now there’s very little,” Mr Christie said. “If you go to Lyford Cay there’s hardly anything; very little to buy. There’s one or two homes, but usually there would be 10-15 houses on the market at a time. Now there’s one or two.

“The houses that are on the market, people have been going at them, but for whatever reason they are priced above what people are willing to pay. The owners say this is what they want, and if people don’t pay then they’re not selling. It keeps the prices high. It’s pushed up a lot in the last two years.”

Mr Christie estimated that prices in high-end communities such as Lyford Cay have increased by “at least 75 percent” over that period, and the combination of low inventory and high demand will ensure no decline in the immediate future. “There will be less turnover because there are less properties to sell, but prices will remain high,” he added.

Peter Dupuch, ERA Dupuch’s founder and president, told Tribune Business he had encountered the same problems as Mr Christie. “We’re running out of inventory,” he said. “We were showing at Lyford Cay on Monday, and didn’t have a whole lot of homes. Sometimes you go in there and see eight to ten homes in that price bracket, and now there are only four or five. The inventory is getting low, and we need more homes.

“I think it’s been lower since last year. I feel like it’s down a good amount. I feel like there’s only 65-70 percent of the inventory we normally have. It’s in my head that it’s down by at least 30 percent. Supply and demand takes over what’s left, and prices go up. If there’s not a lot left, prices go up.”

Real estate’s importance to the post-COVID economy was recently highlighted by Shunda Strachan, the Department of Inland Revenue’s (DIR) acting controller, who said it had helped fill the void in the Government’s income created by tourism’s pandemic shutdown. She disclosed that almost 31 percent of VAT revenues collected by her agency between July 1 last year and end-May 2022, or some $220m of $712m, originated from property deals.

This translates into more than $2bn in real estate sales being brought forward for stamping and the payment of taxes during the first 11 months of the 2021-2022 fiscal year.

Damianos Sotheby’s International Realty earlier this year revealed property sales for the 2022 second quarter increased by 34 percent compared to the year’s first quarter. And the sales value of properties sold soared by 73 percent quarter-over-quarter.

Meanwhile, the average sales and list prices for properties handled by the realtor, which specialises in the high-end luxury market, jumped by 30 percent and 8 percent, respectively, for the June quarter compared to the first three months of 2022.