The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian realtor yesterday disclosed his average property sales price has “tripled” compared to pre-COVID levels with one-third of all transactions realising either what the seller is seeking or higher.

Ryan Knowles, of Maison Bahamas Real Estate, told Tribune Business he was confident high-end Bahamian real estate will continue to enjoy a boom market for another two years - despite rising US interest rates, inflation and fears of a recession - as developers prepare to respond to demand for more inventory.

Asseerting that high-end waterfront properties in The Bahamas are still priced significantly lower per square foot compared to rivals in Miami and the Hamptons, he added that another sign the strong demand will sustain is that Jet Nassau, the fixed base operator at Lynden Pindling International Airport (LPIA), also enjoyed a “record year” for 2021.

Bahamian realtors across-the-board continue to feel the benefits, with Damianos Sotheby’s International Realty yesterday releasing an e-mail in which it revealed property sales for the 2022 second quarter increased by 34 percent compared to the year’s first quarter. And the sales value of properties sold soared by 73 percent quarter-over-quarter.

Meanwhile, the average sales and list prices for properties handled by the realtor, which specialises in the high-end luxury market, jumped by 30 percent and 8 percent, respectively, for the June quarter compared to the first three months of 2022.

And Mike Lightbourn, Coldwell Banker Lightbourn Realty’s president, told this newspaper that sales in destinations such as Long Island - not a traditional magnet for international real estate buyers - were “going like a house on fire” despite ongoing concerns over the global economy’s health amid stock market volatility and the crash in digital asset valuations.

Mr Knowles, though, echoed his counterparts by saying he was “pretty confident we’ll be OK” amid the turmoil with the relatively low supply of real estate inventory available for sale set to support prices. “In the past couple of months I’ve seen properties sell above ask or at the full asking price,” he revealed.

“I would say we’re seeing that in about one-third of the cases where we’re selling properties for full ask or above ask. Our challenge going forward is going to be inventory. The above $5m-$10 market is incredibly strong, and the above $20m market is also strong. We’re seeing a ton of demand and not many properties available. A lot of them would have sold in the last 18 months and we’ve not seen a supply replacement.”

However, Mr Knowles added that property developers appear ready to fill the void. “They are beginning to see that,” he said of the inventory shortage. “There is a lot of discussion about developments that may be about to happen. That is a good sign of confidence in the market when developers are prepared to take a risk and put shovels in the ground.

“That’s a good indication we’re going to have a strong market for another two years. I think The Bahamas is going to continue to emerge as the luxury Caribbean destination even more so than it has been in the past. There’s a very exciting project that’s going to hit the market soon, towards the end of the year, and be a game changer although I cannot say anything about it.”

Describing 2021 as “a record year” for himself and likely many other Bahamian realtors, Mr Knowles said 2022 has been “even stronger”. He added: “My average sales price has tripled, and our firm’s average sales price is also well up. We we were doing average deals around $750,000 to $1m [pre-COVID], and that’s gone up to a $3m average sales price.

“We’re seeing strong demand from the luxury sector. People come here wanting to spend $3m, $4m, $5m and up, and wanting to be in gated communities. We’ve done a couple of transactions in Old Fort Bay, but also the Ocean Club as well.”

Arguing that high-end buyers are deriving “value for money” by selecting The Bahamas, Mr Knowles added that a $5m or $10m waterfront property outlay “still goes a longer way than it would in Miami and the Hamptons. You get a lot more bang for your buck in The Bahamas still. You can buy a beachfront property in The Bahamas for $10m, whereas in Miami it’s $25m-$30m and, in the Hamptons, it goes up to $40m. The price per square foot is way lower”.

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.