The second home market has flourished and Bahamian realtors and contractors have all benefited, according to Minister of Financial Services and Investments Allyson Maynard-Gibson.
But not all realtors agree with her assessment, claiming that the benefits that may have flowed from the sale and construction of second homes are not yet trickling down to many in the industry.
Minister Maynard-Gibson, who gave a nationally televised evaluation of the financial services and investments sector on Wednesday night, said that between May 2, 2002 and April 15, 2003, there was an 83 percent increase in land sales over the corresponding period for the previous year, which stood at $480.8 million.
For that same period, she said, government revenue through stamp duty amounted to $44 million compared to $10 million the year before. This represents a significant increase of 318 percent, she pointed out.
“International landholding investments in second homes or vacation cottages and commercial ventures continue to foster economic growth and sustained development in our country and we remain committed to the development of the second home market,” she said.
One Lyford Cay realtor told the Bahama Journal that there have indeed been positive signs of growth in that market as The Bahamas remains an attractive destination for second home owners.
The word, however, from several other realtors was that business remained relatively slow. It’s something that past president of the Bahamas Real Estate Association David Morley hinted at Thursday.
“The market today is neither a buyers’ market or a sellers’ market,” Mr. Morley said.
In the second home market, he said properties are still being sold in the high-end areas like Lyford Cay, which is home to many wealthy individuals, many of whom are second home owners.
These individuals are usually able to withstand the pressures of a sluggish world economy because they tend to have more disposable income, he pointed out.
“In the second home market, from what I understand in the value range of a half million to one million dollars, is more or less non existent,” he said. “Those are the individuals, based on the world economy…who for whatever reason, just don’t have the disposable income to own a second home.”
Mr. Morley said having spoken with many contractors like Cavalier Construction Co. Ltd., the amount of construction taking place right now is far less than what took place last year and the year before.
“From what I understand, there are not very many big projects on the horizon,” he said. “There are a lot of people who are talking about doing construction but [there aren’t many] putting their signature on a dotted line at this point in time.”
The harsh economic times that some realtors are facing are reflected in figures from the association that show that back in 2000, there were about 580 licensed realtors throughout The Bahamas. As of last year, there were approximately 380 licensed realtors.
“The number of licenses based on my understanding is really a reflection of the market conditions,” Mr. Morley said. “Unfortunately, 200 people in a span of two years realized that it’s not easy to make money in real estate.”
Going forward, he said, there is good opportunity in the market. Concessions for homeowners – which came about as a result of recent legislation – are also good news for the sector and should promote business, Mr. Morley said.
There are other realtors expressing optimism as well. Kevin Cross, a realtor with Bahamas Realty Ltd., said in recent weeks, business has been improving, after some realtors experienced a drop in sales last year.
“Since September 11 (2001), everything died off as far as the second home market was concerned,” Mr. Cross said. “Now, we’re actually experiencing good times, really, in the real estate business,” he said. “I’ve noticed an increase in interest for tax reasons among Canadians and Europeans.”
Future sales are “considerable higher” than last year, Mr. Cross said. He said sales of private islands have recently increased.
In her national address, Minister Maynard-Gibson also said the government was concerned about the burgeoning home rental industry in various Family Island communities which has been established by non-Bahamian second homeowners.
As partners in national development, she said investors should be mindful of considerations being made by the government including: minimal standards ought to be instituted so that the promotional efforts of the Ministry of Tourism are not undermined; some form of licensing fee ought to be implemented; a policy should be developed that takes into account the views of each community in which this market had growth potential; and no such rentals should take place unless they enhance small hotels in the Family Islands.
She added that, “I am concerned with the many applications made to the Investments Board for land transactions less than $10,000.”
By Candia Dames, The Bahama Journal
