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Realtors optimistic ‘hottest market in 40 years’ survives

• And revenue rises of up to 79% endure

• Rising US rates, uncertainty pose threat

• ‘We’ll ride wave for as long as we can’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Realtors are closely scrutinising whether “the hottest market The Bahamas has seen in 40-plus years” can survive rising global headwinds as they seek to maintain revenue increases of up to 79 percent.

Tim Rodland, managing partner and broker at Better Homes and Gardens Real Estate MCR Group Bahamas, yesterday told Tribune Business he was hoping the 2022 second half will produce a repeat of the 79 percent and 49 percent year-over-year revenue increases seen during the first and second quarters, respectively, despite growing uncertainty and fears for the US economy’s health and that of the world.

Acknowledging that “every day there’s something new”, with the US and other major economies hiking interest rates to dampen inflation now at 40-year highs, in addition to the post-COVID supply chain bottlenecks and Russia’s ongoing invasion of Ukraine, he added that he was “monitoring the situation” closely for any signs that could produce a slowdown in Bahamian real estate demand. 

Meanwhile Gavin Christie, Corcoran CA Christie’s managing partner, told Tribune Business he was confident the market will sustain its post-COVID surge “over the next six to 12 months” with his firm having enjoyed sales volume increases of greater than 50 percent for 2021 and this year to-date.

Predicting that The Bahamas will “weather the storm very, very well” if a crisis emerges from rising recession concerns, he said this nation will be aided by the past 24 months’ sales surge that had reduced real estate inventory available for sale by 20-30 percent compared to pre-COVID levels. Noting that it remains a “seller’s market”, Gavin Christie added that this supply shortage will help keep prices stable and high.

He was backed by his namesake John Christie, HG Christie’s president and managing broker, who said the Bahamian real estate market has “a lot of counterweight” to any negative global forces through strong international demand and its proximity to the US. He added that properly-priced properties were being acquired as soon as they hit the market, adding that the climate for buyers remains one of “you snooze, you lose”.

Nevertheless, despite his agency’s strong 2022 first half performance, Mr Rodland sounded a note of caution in a video message to clients and other market participants with the Federal Reserve’s recent 75 basis point in short-term US interest rates the largest increase for 28 years as it seeks to combat surging price inflation.

The financial markets are bracing for further US interest rate rise of up to 100 basis points, or a full percentage point, before month’s end, and Mr Rodland said: “In our experience, with the uncertainty in the global markets, it’s causing some clients and prospective buyers to adopt a wait and see approach, and we’re closely monitoring its impact on the real estate market.”

High global oil prices, recent stock market volatility and the plunge in digital asset/crypto currency values have all conspired to potentially dent investor confidence and wealth in recent weeks - something that traditionally hits demand for Bahamian real estate by international buyers.

However, in unveiling an upbeat 2022 first half, Mr Rodland said: “We have seen tremendous growth in our business, and revenues are up 79 percent and 49 percent year-over-year for the first and last quarters, respectively.

“The first half of the year, we experienced lower inventory than usual, which resulted in our agents having to work extra hard to find properties for our buyers, and their hard work has paid off. Sales revenues are up, office morale is through the roof and I couldn’t be more proud of our agency staff and all they we have accomplished.”

Mr Rodland subsequently confirmed to Tribune Business that the revenue increases he was referring to represented greater commission-based earnings from sales, rentals and appraisal activity. While unable to quantify how many potential buyers are becoming more tentative due to increased uncertainty over a possible US recession and wider global slowdown, he added that some were clearly seeing such developments as influences to “think about holding off”.

“It’s been an interesting few months, and we’re monitoring the situation to see how it affects us,” Mr Rodland told this newspaper. “When things happen in the US, it takes a while before it affects us..... Consumer spending is back to pre-COVID levels, but where do we go from here and where do we end up? That’s what we’re looking at.”

While confident The Bahamas has enough in its favour to “continue with that momentum” post-COVID, even in the face of a global downturn, he conceded that everything turns on developments in the US and its fight against inflation. And rising uncertainty makes accurate forecasts virtually impossible.

“I’d like to see those numbers again,” Mr Rodland said of Better Homes and Gardens’ 2022 first half, “but I can’t predict things at this point because there’s too much uncertainty. Normally I would have a better handle on that, but every day there’s something new, and it’s too hard to predict given the level of uncertainty.”

Gavin Christie, though, voiced optimism that demand for Bahamian real estate remains strong and that the country “will fare very well” despite global concerns. “The market has been extremely strong for the past 24 months, and it’s been the hottest market that The Bahamas has seen in 40-plus years, certainly in my time and in my 17 years in the real estate space,” he told Tribune Business.

“I believe the trend is going to continue. We are seeing global trends that are pointing towards slower markets. However, in The Bahamas, I still believe we, in the event there is any global crisis, will still weather the storm very, very well. We don’t have the inventory issues any other places have around the world. The inventory in The Bahamas is limited, and that allows our prices to stay consistent. I believe our market remains really strong and consistent.”

While acknowledging the “domino effect” that adverse global economic developments can have on The Bahamas, Gavin Christie said the limited supply of real estate available for sale will underpin both sellers and the wider market by keeping prices stable and preventing any major decrease.

“It’s a seller’s market, so if you’re looking to list your property now’s a great time. I think that whatever happens globally, The Bahamas will still fare very well,” he added. “We’re still seeing the demand for unique properties and island properties in The Bahamas. Demand is still strong, tourism is up, people are still coming and the numbers in the hotels are still strong. There’s still global demand for The Bahamas, and that will translate into more sales in our market.

“Demand for The Bahamas is so high and so strong, I believe our market will remain consistent over the next six to 12 months.” Gavin Christie said that, compared to pre-COVID, real estate inventory available for sale was down about 20-30 percent due to the buying spree over the past two years, with different price points and products impacted differently.

Beachfront, waterfront and canal-front properties are in especially short supply. “When you have a good listing in the right area, and it’s priced right, it doesn’t stay for long,” he added. “We’re coming off 2021, which was our best sales year ever in real estate, and 2022 is shaping up to be just as good if not better, fingers-crossed.

“Our sales volumes are up past 50 percent for the past two years. It’s been the hottest market we’ve ever had in 40 years. We’ve seen more properties sell. We’ve seen higher prices per square foot, and the volume has just been insane. We’ll ride the wave for as long as we can.”

HG Christie’s John Christie said The Bahamas and its real estate market will not be able to escape the fall-out if US interest rates continue to rise over an extended period, but said his agency remains busy and was “optimistic it will remain” that way for some months to come.

“There are a lot of pluses for The Bahamas, people coming here for tax reasons and things like that,” he explained. “We’re in a much better place than most countries. I think we’ll be fine. We don’t know what six months, a year from now, will bring but from our standpoint it’s pretty positive. It’s been a very good year this year so far.

“Naturally sales will slow down because of lack of inventory. Two years ago there was probably three times’ the inventory on New Providence that there is now. There’s been a lot of sales over the past two years, and that naturally forces prices up. If people perceive the world is going to a recession, they tend to hold off on spending, but we’re still looking good.

“If you snooze, you lose. Things are coming on and getting snapped up right away. People that have been around the block see around the corner, and see things might become a little difficult, but I think The Bahamas will be in good shape as opposed to the rest of the world,” John Christie continued.

“We have people coming from all over the world for estate planning, or moving their companies to The Bahamas. We’ve got a lot of counter weight to anything bad happening in the world. That’s counter-balanced by people coming in, and will keep the real estate market very solid.”

Real estate’s importance to the post-COVID economy was recently highlighted by Shunda Strachan, the Department of Inland Revenue’s (DIR) acting controller, who said it had helped fill the void in the Government’s income created by tourism’s pandemic shutdown. She disclosed that almost 31 percent of VAT revenues collected by her agency between July 1 last year and end-May 2022, or some $220m of $712m, originated from property deals.

This translates into more than $2bn in real estate sales being brought forward for stamping and the payment of taxes during the first 11 months of the 2021-2022 fiscal year.

Comments

TalRussell 2 years, 6 months ago

Ask the three relators any and everything you ever wanted to know about how to go mining for sand dollars from their agency's best 40-plus years enjoying selling-off our colony's lands and residentials to foreigners ― Yes?

ThisIsOurs 2 years, 6 months ago

Who wouldnt be happy to make beaucoup dollars on their job? But when you think about it, it is a weird thing to be proud of decades of selling off bites of the Bahamas to foreign persons and then fight so you get the right to do it but the foreign man cant.

One 2 years, 6 months ago

Yes, selling the country to foreigners. Unsustainable and minimal distribution of wealth to the average Bahamian.

hrysippus 2 years, 6 months ago

Most of all the large real estate sales in The Bahamas are from one foreign owner to another foreign owner. The truth is very few people in the world have the financial resources to buy, build, and develop on a Bahamian Out Island. Just how many Bahamian citizens really want to live on, say, Bird Cay with mo one close, no shops, and only accessible by boat. But don't let me stop the plaintive whining.

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