The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Real Estate Association’s (BREA) president yesterday shot down suggestions by one of his predecessors that a ‘three-year moratorium’ on new realtor licenses be imposed, branding it as “not in the best interests of the Bahamas”.

Franon Wilson said the call by Pat Strachan, which was issued to media houses yesterday, ran contrary to the notion that the Bahamas was an ‘opportunity society’ or ‘meritocracy’.

Pointing out that such a move would deny aspiring young Bahamians, who had spent time and money studying to achieve their realtor ambitions, their lifetime goal, Mr Wilson effectively decried the suggestion as ‘protectionist’.

Mr Strachan had argued that with the Bahamian real estate market still struggling to recover from the recession, and the domestic residential housing sector down as much as 50 per cent, the steady annual influx of new realtors was leaving everyone with a smaller share of a shrinking pie.

However, suggesting that it would “not be right” for other professions, such as attorneys and accountants, to introduce such a ‘moratorium’, Mr Wilson said existing Bahamian realtors should eschew protectionist measures and instead focus on improving their own businesses.

Still, justifying his call for the Real Estate Board to impose a moratorium on new realtor and appraisal licences for three years, Mr Strachan said the situation had been exacerbated by a precedent-setting Supreme Court ruling.

That verdict has effectively permitted the licensing of part-time realtors on New Providence. Although unaware of how many persons held such a licence, Mr Strachan told Tribune Business: “The fact of the matter is we can’t put the brakes on any more. The ruling has really opened the floodgates.”

Around 700 Bahamians were currently licensed as realtors, and Mr Strachan said the moratorium was necessary to counter the impact of the Supreme Court’s ruling.

“In addition, we are bogged down with a soft economy that could drag on for another three to five years,” he added.

“On top of that, the real estate market has been in recession since 2008 and continues to be. This again is projected to continue. The banks have tightened up their lending policies and made it very difficult, if not impossible, for persons to get a mortgage.

“This has made it very difficult for persons in the business to earn a living. Therefore, I believe it is only rational for the Board, in order to retain its present membership, to impose a three-year moratorium in the issuing of salespersons and appraisal licenses to practice real estate in the Commonwealth of the Bahamas.”

Mr Strachan told Tribune Business that while listings were plentiful, it was “a real problem” to close real estate transactions if the buyers needed mortgage financing.

With property listings not moving as rapidly as before, he added: “Something needs to happen like yesterday.”

Suggesting that activity in the domestic housing market was down “50 per cent if not more” from pre-recession levels, Mr Strachan said that despite Baha Mar’s $2.6 billion Cable Beach project, he could see nothing on the horizon to turn the economy around to the extent needed within the next three-five years.

As a result, he urged BREA to focus on its existing membership, getting them to repeat entry level courses or upgrade their skills through courses on listing, marketing and selling strategies.

“The Board may see a dip in revenue because the entry license course held twice yearly generates around $100,000,” Mr Strachan acknowledged. “However, with some effort, that could be replaced if the Board conducts three to five training courses on a yearly basis.

“In addition, the Association could raise funds through hosting two to three meetings a year with a guest speaker. Obviously the training courses would generate revenue to replace the entry license courses. By completing these courses conducted by the National Association of Realtors (NAR), our membership will meet the requirements to attain the highest and most recognised designation (CRS, CIPS and CRB) in the real estate field.”

And Mr Strachan added: “It only makes sense that the Board put in place a moratorium. Presently, the real estate market is bombarded with tight lending restrictions, a few qualified prospective buyers, a ton of listings and a stagnant economy.

“Right now, the sole purpose of our president ought to be to ensure that policies are put in place to assist with the survival of its members. However, by adding 100 members a year, you are looking at 1,000 new members over a 10-year period. By doing that you’re tightening the noose around its members’ necks. Now is the perfect opportune time to put a moratorium in place.”

But, while welcoming Mr Strachan’s “spirit” for continuing to offer suggestions, Mr Wilson yesterday said this latest one “does not seem to be in the best interests of the Bahamas”.

He added that BREA should not “go out of its way to get around” the Supreme Court ruling on the licensing of part-time realtors on New Providence.

“If you don’t like the economic circumstances and implications, you have to live with that,” Mr Wilson said. “I accept real estate goes in cycles, and we are not at the high end of that cycle, but we’re not in freefall like we were a couple of years ago, and are steering in the right direction.”

Mr Wilson told Tribune Business that BREA had to “stay true to who we are and give people an opportunity to earn a living”.

Suggesting that full-time realtors gaining less business than part-time counterparts should take a hard look at their operations, and question if real estate was the business for them, the BREA president said this industry was not the only sector where there was an oversupply of professionals.

He questioned whether the Bar Association and Bahamas Institute of Chartered Accountants (BICA) would ever consider imposing a moratorium on new entrants to their profession simply because existing members were not making money.

“This is the Bahamas Real Estate Association, not just the Real Estate Association, so we’re here for all Bahamians,” Mr Wilson told Tribune Business.

“If we close the door to people on the basis that certain groups of people are not making enough money, I don’t think that’s in the interests of national development.

“National development is meant to give people an opportunity to take part in what the Bahamas has to offer.

“Others who have been in the industry longer, it’s up to them to look at their service offering and product they provide, and see how they can improve themselves rather than keep people out.”