The Tribune

A leading realtor has urged the Government to stimulate the housing market as a way to kick-start economic growth momentum, suggesting it look at incentives such as a temporary Stamp Duty rate cut to 6 per cent.

Mario Carey said incentives to encourage housing market activity, involving both new construction and sales of existing homes, will spur economic growth in a way that no other quick fix with long-term benefits can.

“The housing market in Western societies is a leading predictor of economic health,” said Mr Carey, founder and president of MCR, one of the country’s top property sales, leasing and management firms.

“Strong sales mean a strong and healthy economy, and when sales fall off, it’s just a matter of time until you see a slide in all aspects of an economy.”

More than just an economic barometer, housing sales translate into jobs, he said. “Every home that is sold generates three full-time jobs, according to research commissioned by the National Association of Realtors in the US,” added Mr Carey.

“Here, that number would be even greater. In both places, the spin-offs from home ownership are enormous and create sustainable business activity. It is not just the fees generated by the move itself but the ongoing expenses the homeowner assumes – lawn and gardening services, painting, perhaps pool or roofing or plumbing, electrical, air-conditioning, furniture, d�cor, appliances.

“There are also the benefits to government from Stamp Tax. On a luxury property sale of $10 million, for example, government immediately collects $1 million in Stamp Tax. Incentives move people at every income level. If the Stamp Tax is reduced to 6 per cent for a specified time, the buyer considering a purchase may be prompted to complete and save a substantial sum when they split the tax with the seller.”

Mr Carey, who has handled more than $1 billion in transactions in a career that spans three decades, pointed to past successes when incentives were offered.

“When the Government offered Stamp Tax exemptions for first time home buyers, we saw a tremendous response,” Mr Carey said. “Then, when the first $250,000 of a purchase was exempted from real property tax and Stamp Tax, it was another incentive, and when the interest on outstanding balances of real property tax forgiveness was announced, that drove hundreds to bring their past due tax bills up to date.

“Incentives work and there has never been a better or more important time to introduce them to spur the housing market which, in turn, will show diversification of the economy, leading to a strengthening of our credit rating.”

Mr Carey has long argued that real estate should be recognised as the third pillar of the Bahamian economy, tying activity in the market to new construction, remodels and expansion.

“If anyone doubts how critical home ownership is to a healthy economy, look at what happens when sales slump,” said Mr Carey.

“When the housing market collapsed in 2008, it took the rest of the economy down with it and we are still feeling the repercussions, though I believe the economy is beginning its slow climb back up for the middle to upper middle class family who was so hard hit by the economic freefall.

“I encourage the Government to appoint an ad-hoc advisory committee comprised of real estate professionals, developers, financial institutions, the Bahamas Chamber of Commerce and a few successful businesspersons to report back in a relatively short period of time with recommendations for jump-starting housing sales across the board,” he added.

“I want to see the day when every Bahamian youngster coming out of school believes that he or she will own a home and that can be their reality. Home ownership is the single fastest route to economic prosperity. And it is one step we can take without damaging the environment or causing long-term negative impacts. It is time to explore the options.”