The Tribune

• ‘Market correcting’ as Nassau home sales drop 21%

• Reverting to pre-COVID highs following an ‘anomaly’

• Realtor still ‘super bullish’ and say no slowing down

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian property market is “correcting itself” to more sustainable pre-COVID highs, realtors agree, with 2023 second quarter New Providence home sales down 21 percent as “the bull can only run for so long”.

Several principals spoken to by Tribune Business have backed the conclusion by Morley Realty, based on data obtained from the Bahamas Real Estate Association’s (BREA) Multiple Listing System (MLS), that the fall-off in closed property sales during the 2023 first half reflects a return to pre-pandemic highs experienced in 2018 and 2019.

Both Gavin Christie, Corcoran CA Christie’s managing partner, and Tim Rodland, managing partner and broker at Better Homes and Gardens Real Estate MCR Group Bahamas, said they “agree” that the property market is “on the back end of the spike” post-COVID and adjusting after the “anomaly” experienced for much of the past two years.

Describing this as a natural correction, rather than a “slow down”, Mr Christie said persistent shortages of available-for-sale properties in the high-end mean that while transaction volumes have decreased their sales values have increased which has “balanced the numbers out”. He added that, at present, it is especially difficult to pair buyers in the $2m-$5m range with their ideal properties due to the lack of inventory.

Mr Rodland, meanwhile, said he remains “super bullish” on The Bahamas when compared to other jurisdictions. He added that the real estate industry is feeding-off the improved tourism numbers, together with increased airlift and accessibility to The Bahamas, with the US west coast set to open-up this Christmas via new service from Jet Blue and Alaska Airlines out of Los Angeles and Seattle.

Morley Realty, in its analysis of MLS data, found that the number of closed residential homes sales on New Providence during the three months to end-June 2023 was down 21 percent year-over-year - at 59 compared to 75 in the prior year - although this was flat against the 2023 first quarter.

Many of the other major islands showed similar trends. Abaco’s closed home sales during the 2023 second quarter were down 33 percent year-over-year, standing at 20 compared to last year’s 30, and Morley Realty added: “The volume of closed home sales has remained relatively consistent since the 2022 fourth quarter but remains down from the first three quarters of 2022.”

Eleuthera’s closed home sales for the three months to end-June 2023 were down almost two-thirds compared to the prior year, standing at ten versus 27, while Grand Bahama during the same period saw “the lowest volume of closed home sales in the past six quarters [which] was one-sixth of the 2023 first quarter volume”.

Summing up, Morley Realty said in referring to these islands plus Exuma: “The Bahamas real estate market data from the 2023 second quarter showed continued signs of a market slowdown, primarily because of the year-on-year decline in the number of closed sales in each of the five island markets in both home sales and land sales.

“This slowdown has been expected, knowing full well that the abnormally strong market and related frantic pace seen in 2021 and the first half of 2022 could not be sustained. While the volume of year-on-year closed sales may be down, the volume in each of the last two quarters appears to be at pre-pandemic levels.”

Responding to this conclusion, Mr Christie said: “I can agree with that. Post-COVID was kind of what I call the abnormal years. They were abnormally great for the real estate space, and they were record years - not just for real estate companies but the country.

“We saw record numbers in regard to the real estate space post-COVID and now, today, I don’t think the market has slowed down. I think the market is adjusting and correcting itself... It was an extraordinarily robust market, but I think we all knew and understood the bull can only run for so long. Now, fast forward to today, the market is correcting itself.”

Mr Christie, pointing out that it was not just The Bahamas but the entire global real estate community that has benefited from the post-COVID property boom, added: “Some people may think the market is slowing down. I tell them ‘no, it’s not slowing down’. It’s just correcting itself to something that’s sustainable.

“The demand is still very strong, and probably the biggest challenge we have in the luxury space is inventory. Unfortunately, I think it’s going to continue in that vein for some time. Just a lack of inventory, and that’s driving the price points. If you have a client looking to spend between $2m to $5m now, it’s difficult to pair them with the right property because the options are extremely limited.

“There’s a bit more inventory in the $10m-plus, but even there demand is outstripping inventory. For us, the business is still robust. What we have seen is the transaction level may have dropped, but the transaction value has increased. The numbers are balancing out at post-pandemic levels.”

Predicting that strong demand in the high-end Bahamian real estate market will continue, Mr Christie said recent wealth reports he has reviewed show that the world presently has its greatest-ever number of millionaires and this is forecast to grow by 40 percent between now and 2026.

Describing this as “a big jump and a positive jump”, he also noted that some $96bn of global wealth is reported to be on the move looking for new destinations and investments. All this, he argued, bodes well for The Bahamas and its ability to attract and grow its target high net worth individual market.

“What they look for is destinations that afford them the same lifestyle they’re used to, and destinations that are tax friendly and tax neutral. When you narrow it down, The Bahamas ticks a lot of those boxes and is top of the list for many of those high net worth individuals,” Mr Christie added.

“The Bahamas is a very strong name and a very strong brand when it comes to high net worth individuals and globally. I think we do a fantastic job attracting them, and that will continue and we will grow and attract a lot more.”

Mr Rodland, echoing much of what Mr Christie said, added that available-for-sale real estate inventory is “at an all-time low” and “those exorbitant price points we were getting” post-COVID are now not quite at the same levels.

“It’s just not what we were getting post-COVID,” he told Tribune Business. “It was a rush, it was an anomaly, and we’re now on the back end of the spike. That’s the best way to describe where we’re at right now. Everybody wants to go back to post-COVID, to the record numbers and people paying exorbitant prices for property, but we’re not in a bad position.

“I think The Bahamas has a very good position in comparison to other jurisdictions and has a lot to play for. That has a lot to do with the market. I feel like the brands we have attracted to the country, and airlift and accessibility of the island, all that is better. If we can focus on the ease of doing business it would be even better.

“The ease of doing business, we need to fix that, but we’ve improved our product tremendously. It will help a lot. We get complaints about that, but I know it is something the Government is trying to work on. The market is doing OK, and has a lot to do with our competitiveness in the region and product we have. Tourism has done very well and, as a result of that, real estate has done very well. That has a lot to do with the brands, the hotel brands that we have attracted.”

Describing Bahamian real estate’s prospects as “still healthy”, Mr Rodland added that the industry will benefit from the “spin-off” created by tourism and increased airlift. “I’m bullish on The Bahamas between now and the end of the year and into the first quarter next year,” he said. “There’s a lot of factors in play between now and the end of the year, but we’re in a good position. I’m super bullish on The Bahamas right now. There’s a lot to be thankful for.”