Home ownership is on the rise, according to a newly released Central Bank report and financial lenders.
New mortgage commitments have doubled, growing from $79.7 million in 2004 to $143.8 million in 2005, noted the first economic report released for the year.
According to Rory Higgs, managing director of the Bahamas Mortgage Corporation, there has been a significant amount of real estate development in both the private and public sector to correspond with the increasing demand for homes.
The Central Bank report lists the construction boom as a “real indicator” which suggests that economic growth in 2006 should remain firm.
“There has been an aggressive move by the Ministry of Housing to produce more homes and there are also likewise a number of private developers that have been producing homes at a very fast pace over the past two years,” Mr. Higgs said in an interview with The Bahama Journal Wednesday.
“The statistics that are being reported by the Central Bank are statistics that reflect a move to produce sufficient supply for the huge demand out there.”
But that is not to say the demand is being adequately serviced.
From his experience, Mr. Higgs said there are thousands of persons waiting for homes “and we can’t produce them quickly enough.”
He believes the risk acceptance criteria at a number of commercial banks are not as rigorous as they once were.
“I think they have been relaxed a bit,” Mr. Higgs said.
“We, here at the mortgage corporation, tend to be a bit more liberal than the commercial banks, particularly in the area of providing homes to persons who are self-employed. It is usually difficult for persons who are self-employed to obtain loans, because the process of verifying income is very difficult.”
Walter Wells, Senior Vice President of Mortgage and Commercial Lending at Commonwealth Bank, agreed that banks are generally making it easier today for customers to qualify for home loans.
“People are qualifying for homes. There is greater emphasis on homeownership-I do believe that banks are catering more and more to that segment of their customer base who previously might not have qualified because they didn’t have a significant deposit they could place on a new home,” he said.
“There is a very strong demand for Bahamians looking to upgrade existing homes or purchasing a first home. I guess a lot of people are tired of paying rent or may be newly married or whatever, but there is generally a very strong demand in the market for new mortgages at this point in time.”
According to Mr. Wells, Commonwealth Bank is constantly seeking to attract mortgage policies.
He said that in previous years Commonwealth Bank has had a very strong focus on consumer credit and in more recent years they have placed significant emphasis on mortgage lending.
“We are trying to provide a complete service to our client base rather than focusing strictly on consumer credit or credit cards, we are also focusing on homeownership, debt consolidation, etc.,” he said.
By: Tosheena Robinson-Blair, The Bahama Journal
