The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known Bahamian realtor yesterday revealed that his firm enjoyed a “bumper year” in 2021 with closed property transactions increasing by 400 percent year-over-year.

George Damianos, president of Damianos Sotheby’s International Realty, told Tribune Business he was optimistic that 2022 would be equally as strong for the high-end market the company specialises in following 2021’s five-fold jump as he forecast the sector will “stay strong” for another two years at least.

Suggesting that the COVID Omicron variant was unlikely to dampen international buyer interest in The Bahamas unless border/travel restrictions were unreasonably tightened, he added that the Government’s recent move to eliminate the 12 percent VAT rate on the portion of property purchases valued over $2m would create a further “psychological” boost that aids the sector.

“We had a bumper year in 2021. We were up 400 percent over 2020 on closed transactions, volume and value,” Mr Damianos disclosed to this newspaper. “Our average list price today is $2.5m, and the average sale price in 2021 was $1.75m. 2020 was also up over 2019.

“It was a good year for real estate companies in The Bahamas. If you missed that, you will be feeling pretty sad. I’m optimistic, and think 2022 will be equally as strong - maybe a bit less. You might have a slightly lesser year in 2022 because inventory levels are lower, but I’m optimistic because that demand will be there.

“I think the real estate market is good in The Bahamas, and it should stay that way for another couple of years.” Mr Damianos said the realisation that the world will be living with COVID-19 and its variants for some time to come was helping to stimulate demand for Bahamian real estate as buyers sought out socially distanced with reduced infection possibilities (Omicron notwithstanding).

“People are at a stage in their lives where they want to make a decision and enjoy a place like The Bahamas, and have a second home or set up residency and move here,” he added. “People think: Do it now rather than later. This COVID thing will be around for a while, so let’s get it done, go somewhere with the family, and have a nice vacation. Wealthy people have a lot of money these days.”

Mr Damianos said he presently saw no further COVID-related market disruption “unless these travel restrictions become onerous and people are not able to come to The Bahamas”. And he argued that there were few better hedges against inflation and/or new and increased taxes in the US “than a hard asset like real estate, especially a beachfront or oceanfront property in The Bahamas”.

The Damianos Sotheby’s chief said the Davis administration’s decision to return to one single VAT rate, 10 percent, on all real estate transactions and eliminate the 12 percent on the $2m-plus portion provided simplicity and reduced closing costs.

As for the actual financial impact, he added: “Realistically it’s more psychological than the actual dollars and cents. Would you have deterred a buyer because he had to pay an extra percentage or two to the Government? I don’t think they would have walked, but it’s a nice boost because people will think they will not be taxed to death in The Bahamas.

“The more taxes you put on foreign and Bahamian purchasers, the more onerous it is to purchase than beforehand. With easing taxes, you should get more transactions and those transactions will bring more to the Public Treasury than the extra two percentage points. We’re optimistic.”

Mike Lightbourn, Coldwell Banker Lightbourn Realty’s president, similarly told Tribune Business that his firm enjoyed a record year in 2021. “We were way up over 2019,” he confirmed. “It was better for everybody. The only ones who might have had a difficult time would be those only dealing in the Bahamian market because of buyer problems getting financing. That’s not going away.

“We’re just going to keep our fingers crossed, that’s all I can say, and if we keep COVID cases down then things should be good. The money is there. I think interest rates will go up in the US a little bit, but not enough to affect tourism. The outlook is bright subject to the unknown. Right now, everything looks good, but this Omicron variant, COVID, we don’t know what effect that’s going to have.”