The Tribune

* High-end property ‘going gangbusters’ and ‘insane’

* Colleague writes up $20m offers; many sight unseen

* Rival’s inquiries up 120%, but ‘thin line’ on more tax

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent realtor has revealed his firm is enjoying “the best year in our 99-year history” with the high-end Bahamian property market “going gangbusters” following its post-COVID lockdown emergence.

John Christie, HG Christie’s president and managing broker, told Tribune Business that the company had achieved “record sales” with the year only half-way through as transaction volumes surged to a 50 percent increase compared to 2019.

Disclosing that his firm has already closed 165 to 170 sales for 2021 to-date, compared to the typical 220 it would handle in a full-year pre-COVID, Mr Christie said he and other realtors were “just riding the wave” of pent-up pandemic demand that is aiding economic recovery amid the wait for a full tourism rebound.

Other realtors were just as bullish as Mr Christie. Matt Sweeting, chief executive at 1oak Bahamas, told this newspaper that his agency was feeling a boost from international buyer demand for multi-million dollar Bahamian real estate despite being focused “predominantly” on the market’s low end.

Disclosing that he was receiving significant inquiries from offshore purchasers, many of whom are willing to buy “sight unseen” in high-end communities such as Ocean Club Estates, Mr Sweeting revealed he had just “written up” offers that came to a combined $20m.

And Gavin Christie, C.A. Christie Real Estate’s managing partner, yesterday disclosed that his firm’s sales were “up 50 percent easily” while inquiries in “unique properties” such as private islands had more than doubled, jumping by 120 percent. He added that he had sold three private islands within the last 13 months, which he described as “unheard of”.

Though not as strong, the realtors described “the middle market” - featuring properties valued in the hundreds of thousands of dollars - as “consistent” even though “inventory is not flying off the shelf” as is occurring at high-end price points.

And, while some observers may view this level of activity as justification for increasing taxes on multi-million dollar real estate higher than the Government’s 2021-2022 Budget move, Mr Christie warned there was “a very thin line to walk” beyond which buyers could be deterred from purchasing by the burden of closing costs, taxation and fees.

Still, Mr Christie told this newspaper of high-end real estate: “This is definitely by far the busiest it has ever been. It’s gone gang busters really. We’re having record sales. We’ve had the busiest year so far in our 99-year history, and that’s only for half-a-year. It’s the best year and we’re only half-easy through. It’s just gone crazy.

“The sales volume is high, but it’s coming more from the big ticket items; the dollar volumes. The Bahamian market is pretty strong, the middle market, and the high end at $10m and above is very strong. It’s just incredible. We’re 50 percent higher than in 2019. I recall one US broker where he said to me that we don’t know what’s going to hit us. So many people are coming out because of the vaccines in the US.”

Mr Christie attributed the surge in high-end Bahamian real estate to what he described as “the sling shot” effect created by pent-up demand stemming from last year’s COVID-19 lockdowns and other health restrictions.

He added that it was also being fuelled by fears of increased taxes and inflation, the latter driven by government spending, both in the US and worldwide, with investments in Bahamian real estate being seen as a hedge and safe haven against these twin impacts.

Mr Christie said American buyers have had “the pick of the litter so far”, with travel restrictions preventing Europeans and Canadians from visiting in previous numbers, yet he voiced optimism that their eventual return would help to sustain the present boom.

“It looks like it will continue throughout the year and we will see what happens next year,” he added, noting that there had been a rush to close upscale property deals before July 1 and the imposition of the increased 12 percent VAT rate on the transaction portion valued at $2m and above.

Revealing that “the biggest issue” now facing the market is lack of available inventory in communities such as Lyford Cay and Old Fort Bay, which could push prices up, Mr Christie said increased foreign real estate investment was helping to bolster the external reserves, generate critical foreign currency inflows and taxes, and boost activity for sectors such as construction, landscaping and domestic services.

“The private real estate industry is bringing in money where tourism is slow,” he added. “It’s going to be one of the strongest pillars of the economy. Let’s keep it rolling. I think we’ve done 165 to 170 transactions this year, and we usually do around 220 or something,.

“We’re just riding the wave and keeping it going. This is around The Bahamas; it’s not just in Nassau. It’s everywhere. It’s the entire Bahamas. People have never seen anything like it. The realtors are working 24/7 because there’s that much demand.”

Meanwhile Mr Sweeting, who confirmed that the 2021 second quarter has been his agency’s busiest since the beginning of the pandemic, disclosed he had been taken aback by the level of activity and demand in the mid-market that has traditionally been dominated by Bahamian buyers and sellers.

“I can’t even see the justification for it economically,” he told Tribune Business. “Unemployment is high, and Atlantis has done 700 lay-offs. We reckoned people would be contracting, but they are very bullish on real estate in 2021 at both ends of the market.

“I think the lower end of the market is being driven by people having a greater appreciation of ownership and independence. As we celebrate our 48th independence, people have realised they need to be more focused on financial independence through real estate. 

“And, as we can now see light at the end of the tunnel with the pandemic, people who have either been renting or living with their family see the value of owning their own real estate.” Mr Sweeting suggested that the high-end demand was being driven by investors seeking portfolio and income diversification, as well as an alternative environment that was safe following COVID-19.

He added that “there’s a lot of sustainability” to current real estate activity based on market demand, with the likes of Palm Cay, The Pointe, GoldWynn and Villa Nova all bringing new inventory to market.

Mr Christie, though, simply said that “the real estate market has gone crazy” at price points of $3m and above, adding: “In my career it has been the busiest I have ever seen it, and most brokers who have been in the business for ten, 15 and 20 years would probably agree.

“In my career it’s probably the first time where I can say it’s truly a seller’s market in the luxury space in terms of prices and inventory. There’s very limited inventory in the luxury space, and there’s been a lot of pent-up demand.

“Compared to where we were [pre-pandemic], are sales numbers are up 50 percent easily. Our inquiries for unique properties, private islands, are up 120 percent. I’ve sold three private islands in 13 months, which is unheard of. It’s insane,” Mr Christie said.

“One of the biggest issues we’re having now is finding the inventory. The buyers are still coming, the requests are coming in, the queries are coming in, but we’re having difficulty fulfilling their requests because of lack of inventory. It’s something we have never seen before.”

Mr Christie said he expected the present real estate spike to “continue for the near future”, but added that it may taper-off as the COVID-19 pandemic eases and more persons become vaccinated with travel opening up.

As to whether high-end real estate can absorb more taxation, Mr Christie replied: “There’s a very thin line that you walk, so you don’t want to tip the barrel too much because it could have an adverse effect if you do that.”