“The Bahamas Real Estate Association is pleased by remarks reported recently in the press by Finance Min. Hon Alyson Maynard-Gibson stating Governmentﾹs commitment to the development of the second home market. However, we do differ on her assessment of current market conditions,” said Bahamas Real Estate Assoc. (BREA) President Garth Buckner, speaking to the Nassau Rotary Club at the Buena Vista Restaurant, April 29
However, he cited several problems impacting the local real estate market emphasizing, “The single largest challenge to moving real estate forward is the inability of the public monopolies to deliver reliable and affordable essential services and to grow at a sufficient pace to meet expanding needs. Development in the Bahamas has hit a glass ceiling and the need to liberalize the provision of essential services is clear. “
He continued, “The proposed National Investment Policy committee is an excellent opportunity to form a new National Investment Policy that helps real estate to flourish by causing utility rates to fall and service to be expanded and improved by allowing for competition in a deregulated and privatized marketplace. “
He added, ” The Ministerﾹs view that the second home market is flourishing and that Bahamian realtors and contractors are benefiting is contrary to our membershipﾹs experience. Bahamian realtors have been experiencing a down turn in their business.
“Our Developer Members report a slow down in projects under construction and many people in the construction industry are out of work.
“This is further frustrated by the current cap on lending imposed by the Central Bank of The Bahamas that has resulted in many leading commercial banks being unable to process either mortgages or construction loans.”
“The economic downturn can be traced,” he said, “to several factors over which the Bahamas has little control, including September 11th, the global recession, building uncertainty leading up to war in the Gulf and the war itself.”
The new Real Estate leader added, “But there are other factors closer to home over which we can and must exert control. With this in mind, BREA endorses Minister Maynard-Gibsonﾹs proactive suggestion that a committee review the National Investment Policy with respect to land and BREA hopes to make a positive contribution.”
He pointed out, “The black listing and the resulting financial legislation that removed us from the list continue to have a profound impact. As does the uncertainty over what the final shape of the regulations under the finance acts will be. “
He explained, “BREA is of the view that the Bahamas has lost business because of this continuing uncertainty, while Property sales and values have continued to perform strongly in both the United States and the United Kingdom during the course of the current down turn. Competitors like Barbados, which attract a large amount of UK investment, have also continued to do well; As have the Turks & Caicos Islands who have experienced steady growth of between 6% and 8% per annum for 10 years.”
He added, “During downturns in capital markets investors tend to liquidate their stock portfolios and, given low interest rates, are forced to do something with the cash. Many choose to invest in real estate. This is exactly what has been happening in major world markets, but it is not happening here. We believe this is because investors are hesitant to invest in the Bahamas so long as the final shape of the regulations under the finance acts remains a question mark.”
He concluded, “BREA commends the Government for its recent policy initiative to make homes more affordable to first time homebuyers by waving stamp duty. There is no question that a stimulated real estate market translates into jobs. BREA is confident that given the right National Investment Policy real estate can indeed flourish and we are committed to working with Government to achieve this goal.”
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