Column: Real Estate, Retail Sales, Construction

August 4, 2015

[Opinion column written by OBA MP Sylvan Richards]

The House of Assembly and the Senate have shut down for the summer, Cup Match is over, and it seems as if we’re somehow starting afresh this week.

But just before the memory fades, let me remind you of some of the good news about the economy that was announced just before Cup Match.

First, the real estate company, Coldwell Banker Bermuda Realty says their first half this year was up by 44% over last year.

“It is exciting,” the firm says, “to see the renewed interest and confidence in real estate with a cautious return to stable prices; multiple offers; and in some cases buyers looking to purchase for investment.

“In this resurging market, a little bit of everything is selling…single family homes, duplexes, multiple family dwellings, land, commercial property and condos.”

Second, the Statistics Department says retail sales rose by 1.4 per cent year-on-year. That’s a very direct measure of the health of our recovery. I know Statistics cautioned that once the figures had been adjusted for inflation it was a relatively flat month, with the volume of retail sales a fraction lower than at the same time last year.

I get that, but what is important is that this was the ninth consecutive month of increases, a sustained series of upticks that must be good news for Bermuda’s retail sector. The Index went up from its 2006 baseline until 2008, but then it caught a recession cold and began to trend downwards.

The last nine months have established an encouraging trend. The figures are not back to where they were, but we can say they’re moving in the right direction.

Third, Bermuda’s construction industry is showing tentative signs of recovery, according to leaders in that field.

Charles Dunstan, the head of the Construction Association of Bermuda, said: “I’m not quite sure why, other than that maybe people are fed up and they’re deciding to do some work prior to things taking off — they’re getting little renovation jobs done,” Mr Dunstan said.

“Construction material sales over the past six months indicate a little bit of an uptick. Most contractors I talk to who have come through the recession are doing fairly well; they seem to be quite busy.

“It’s like the stock market — it’s all based on confidence.”

Something that does not encourage confidence is the lag time between a statistical measurement and the publication of the figures.

Speaking late in June, Independent Senator James Jardine said the lateness of the Island’s jobs statistics renders them “absolutely useless”. He pointed to the latest survey, released that week by the Department of Statistics, from surveys conducted in August of last year. For Sen Jardine, the lack of current information on unemployment leaves the Island’s legislators operating in a fog of supposition.

“We debate unemployment in the Senate and I am quoting a report with information that’s probably a year old,” Sen Jardine said. “We would have a far more positive debate if we had information that told us exactly what’s going on.”

It makes for another kind of difficulty as well, in that it can happen that the Government announces an employment gain at the same time Statistics announces a drop in employment figures. What is the public to believe?

My observation is that in a fight, bad news almost always chases good news right out of the ring.

I’m hoping that pressure will be applied to the Statistics Department, which has a new Director, well-known for her experience and fairness, Melinda Williams. I’m hoping that she will find a way to cut down on the lead time, especially in the case of figures reflecting our all-important employment situation.

Meantime, I’m hearing that the latest complete Labour Force Survey is due out in a few days.

Pay attention. This one will show that things are getting better.

You heard it here first!

- Sylvan Richards

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Comments (13)

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  1. Jeremy Deacon says:

    i. the 44 percent increase in homes sold: 44 percent on what? The original story never gave actual numbers, so it is unreliable.
    ii. retail sales rose by 1.4pc, but what was the volume after inflation was taken into account. That is the important figure.
    iii. The first story about growth in construction was followed up the next day by people saying they did not agree.

    This is a poorly written and potentially misleading piece.

    • James says:

      i. The Bermuda Realty report, which contains the figures in question, is on their website. I encourage you to read it, as it adds color.
      ii. Retail sales are up nine straight months; that some months will be flatter than others does not change the fact that the trend is encouraging, especially when you look at the sectors driving this increase. Again, figures to support these inferences are available online.
      iii. A rise in construction is consistent with the retail sales index and statistics recently released that show new home starts are on the rise.

      • Jeremy Deacon says:

        1. why were the figures not quoted then?
        2. But you need to always quote the underlying figure that takes volume and the rate of inflation into account
        3. The story you refer to was not supported by a follow up article.

        My point is that an MP – PLP or OBA – needs to be called out if spin, such as has been used here, is involved

        • James says:

          Retail sales are up even accounting for inflation.

  2. A Better Place says:

    Good news…finally!

  3. Well…this is good news…I remember not too long ago …when that other party…who were they?…had us in so much debt we had to turn off that light at the end of the tunnel …in order to save lactricity!

  4. Jonah says:

    Now can we have some honest feedback regarding Jetgate?

  5. swing voter says:

    Just open the real-estate market up 100% …..I’m being disadvantaged as my ARV only allows me to sell to locals. This is unfair, considering that everyone that purchased between 2000 – 2008 paid way too much for their properties in a heated, under-regulated real estate market.

    • theothersidebda says:

      No one (unless you paid ‘all cash’ and above the appraised value) paid way too much in 2000 to 2008…they paid the market price at the time. Markets change, all markets. You could say the same thing about the stock market. Your choice of when and whether or not to enter any market rests solely with YOU. I purchased near the peak of summer 2008…and have seen my entire 25% downpayment eroded to nearly 0% at the moment. Sure it sucks, but its a risk that one takes when undertaking any major financial investment. You knew the laws regarding your inability to sell your home to foreigners at the time of investment. So you are not being “disadvantaged”. Why should the law be changed now just to conveniently suit your situation when you knew full well this was not an option to you when you bought the house?

  6. Unfortunately people see and believe what they want to.Opinions are like something else we all have.

  7. In the business says:

    Why would a Government Minister quote a single private business figures and not the Real Estate Division of the Chamber of Commerce. This opinion piece is a reflection of the attitude of the OBA. Selective, misleading use of information.

  8. swing voter says:

    ok things are getting better, but it hasn’t hit my level yet….um still under water, my condo can’t be sold to even PRCs and I can’t find a low level 2nd job because the ……. oh never mind