The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian real estate firm yesterday said sales volumes for the 2022 first quarter had more than doubled year-over-year to produce another record year, its principal saying: “We’re firing on all 12 cylinders.”

George Damianos, president of Damianos Sotheby’s International Realty, told Tribune Business that the strong high-end property market has sufficient “legs” to carry it through the remainder of 2022 after surpassing a then-record 2021 first quarter during the first three months of this year.

Citing a 42 percent increase in properties sold compared to the first three months of 2021, Damianos Sotheby’s - while not providing any gross figures - said its average sales price had also risen by 44 percent year-over-year while the average listing price was ahead by 38 percent.

“We anticipated that 2021 activity would continue on into 2022, which is has,” Mr Damianos told this newspaper. “We’re very thankful and very fortunate to have that. Yes, we are up. We’ve had a nice first quarter. We’re hoping we’ll have a good second quarter, third quarter and fourth quarter. I’m very optimistic about The Bahamas; I think we have a lot going for us here.

“Things are looking good for the second quarter as well. The higher end of the market seems to have the momentum, but I’m pretty sure most of the real estate companies in The Bahamas, the brokerage companies, are seeing an uptick in business and doing well. I’m sure there’s activity in the local market as well as the high-end.

“I think everybody has got their shoulders to the wheel,” he added of his realtors. “We’re functioning on all 12 cylinders right now. We’re working hard, and all factors are coming home to roost right now. I think this will continue for a little bit more. It’s all the great ingredients we’ve had in the past. It does have legs. We’ll see what happens next year, but it already has legs through 2022, no question about that. We’re in a great position.”

Besides The Bahamas’ traditional attractions of US proximity, its stable currency and political environment and climate, Mr Damianos said the uncertainty created by Russia’s invasion of Ukraine will also push Europeans to seek safe destinations that are some distance from the conflict zone.

US buyers, and others, will also likely view Bahamian real estate investments as a hedge against inflation and impending interest rate increases back home, with the volume and size of high-end property transactions since the economy started to re-open post-COVID lockdown likely helping to drive the jump in early 2022 VAT revenues noted by the Government.

With pent-up COVID demand also playing a role, Mr Damianos said buyers had not explicitly stated that inflation and related economic factors were a key factor although they were likely playing a role behind the scenes. “People haven’t quite said it like that, but I do think it’s a part of the combination,” he said.

“Real estate is clearly a good investment, a safe haven for the dollar, so I think it’s a factor that goes into the mix of why people are deciding to buy now and make things happen. If they can find that place, feel it will hold its value and that it’s special and a great investment, why not put that money into it and enjoy that as well?”

Besides New Providence, Mr Damianos said islands such as Abaco, Exuma, Eleuthera and even Long Island were also benefiting from the surge in real estate demand. And another major beneficiary is the Public Treasury, which earns 10 percent VAT on all real estate transactions worth more than $100,000, which translates into hundreds of thousands of dollars on multi-million dollar high end properties.

“The real estate transaction is so significant as opposed to goods and services sold,” the Damianos Sotheby’s International Realty principal said. “They’re [the Government] getting hundreds of thousands of dollars from one transaction, which the Department of Inland Revenue is then collecting.

“The Government is obviously seeing it. Now it’s a question of getting all parts of the Government to work in tandem to close these deals faster, and be more efficient at it, and they would collect money faster which would be beneficial for the whole country and the Treasury.”

Simon Wilson, the Ministry of Finance’s top official, last week touted a 26 percent VAT revenue increase, compared to pre-COVID numbers, for the first two months of calendar 2022 as a signal that the rate cut has not impacted government revenues.

He told the weekly press briefing by the Prime Minister’s Office that the $212.6m in combined VAT revenues collected for January and February 2022 exceeded sums collected during the same two months in 2020 by some $47.1m.

Using those two months rather than 2021 comparatives, as the former represented pre-pandemic figures, he said VAT revenues had “increased dramatically” despite the Davis administration cutting the rate from 12 percent to 10 percent with effect from January 1, 2022.

A significant chunk of the VAT revenue increase may well have been driven by strengthened real estate sales, as well as the elimination of multiple zero ratings and exemptions.