2015: Lot & Commercial Property Sales Increase

January 18, 2016

“Both commercial property sales and sales of vacant lots have increased market wide in 2015 indicating people are considering new construction and investment,” according to the latest Coldwell Banker Bermuda Realty sales market update

The document [PDF] said, “It’s an old adage in real estate that the housing market is a key indicator of the broader economy. When economic times are good, the housing market usually see healthy growth. When economic times aren’t so good, real estate tends not to do too well. If the old adage is true, then Bermuda is a text book case.

“While we have seen marginal increases in year over year average prices since 2014 for all segments of the real estate market, the most telling information is a 60% increase in the actual number of sales transaction Coldwell Banker Bermuda Realty has been involved in compared to last year. This means that more people in Bermuda are willing to invest in our economy and have ready access to funds.

“In fact, 37% of all transactions via Coldwell Banker Bermuda Realty in 2015 were generated by cash buyers. What does this mean – “an increased supply of available cash and an improved level of confidence in Bermuda” says Agency Manager, Susan Thompson. To add perspective to this data, compare it to only 3% of sales in 2010 and 11% in 2012 that did not involve bank fi­nancing.

“The supply of money in an economy is critical to its overall health and especially to housing market health. In a Royal Gazette article [December 31, 2015], Economist Craig Simmons was quoted as saying ‘the island is now out of recession’. The same article states that Bermuda’s gross domestic product has grown for three successive quarters and that monthly retail sales have increased.

“Government has also recently pointed to potential job growth in construction and tourism ahead of the 2017 America’s Cup.

“While we cannot con­rm that the island is out of recession, we can support the positive indications of a healthier economy. For instance, both commercial property sales and sales of vacant lots have increased market wide in 2015, indicating people are considering new construction and investment.

“The average price of a single family home is currently $1,200,000 and despite an abundance of inventory, the average price of condominiums sold in Bermuda was $655,000 last year [2015]. Contrary to popular belief, condo inventory is in fact selling and makes up approximately 27% of total sales.

“Each of these factors point to Bermuda being on the road to economic recovery and long-term sustainability will be supported by trends in other segments of the real estate market as well. For example, shifts in residential and commercial property rentals allow us to gauge the number of new businesses and people coming to Bermuda. Current commercial demand is for 1,500-4,000 square foot spaces located in the City of Hamilton.

“Residential rental demand is also strong in the City of Hamilton and we have seen an overall increase in the number of single bedroom units rented Island wide. There is still a need for standalone 3+ bedroom family home inventory and our four dedicated residential rental representatives have reported an increase in rental activity in the western end of the Island.

The Luxury Home Market Update by Brian E. Madeiros said, “In-house market intelligence indicates that Bermudians were very active in the luxury home market in 2015, as approximately 60% of homes sold over $2M were purchased by Bermudian buyers.

“We anticipate that the market over $2M will continue to maintain this positive momentum in 2016 as our agents are currently negotiating new sales transactions and making preparations for imminent closings on six luxury homes. This is a superb start to 2016 for luxury home sales.

“We anticipate that the demand for luxury homes as a result of the recent Government’s legislative changes to immigration policies and ARV thresholds will continue to build as we move into 2016, producing further sales over $2M.

“This should bode well for other real estate related stakeholders in 2016 such as contractors, architects, general construction and home suppliers; and stamp duties related to the transactions will obviously contribute to the Island’s tax base.

“We are actively looking to secure luxury home inventory in order to satisfy the growing demand from Bermudians, PRCs and International purchasers.

“In analyzing both sold and current inventory over $2M with a focus on days on market, it is becoming much more apparent that pricing a home to reflect current market conditions is critical if you wish to extract your sales proceeds from today’s ever evolving luxury home market within a reasonable period of time.

“Our sales team’s success rate in accomplishing this task speaks for itself, with an average list price to sale price ratio of 92%.”

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Comments (12)

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  1. Would be nice to know the demographic, the friends and family are spending for their networking party.

  2. gunsmoke says:

    Bull!

    • Toodle-oo says:

      Aint no other group in Bermuda more falsely optimistic for their own self serving gains than real estate companies and their agents .
      Let the public think that there’s even the smallest uptick in real estate demand and shazaam ! More unrealistic price increases and higher commissions !

      Further more Mrs Thompson says … “In fact, 37% of all transactions via Coldwell Banker Bermuda Realty in 2015 were generated by cash buyers. What does this mean – an increased supply of available cash and an improved level of confidence in Bermuda” says Agency Manager, Susan Thompson. ”

      Where did this sudden and unheard increase of available cash come from ? We’re still going down and the banks are not freely handing out any money that I’ve heard of. I smell something , something that’s normally associated with where cows are kept .

      These so called ‘cash buyers’ must be a very small group that have hoarded for years previous and are wisely taking advantage of depressed market prices and not buying on credit . After all , how many people does anyone know in Bermuda that actually pay cash for a house ? And I won’t even get into the part about their comfort (confidence) level in the political stability of this place.

      • If I bought a house with cash, the Bank, Police and FBI would be crawling up my @$$ !!!!!!!!!!!!!!!!!!!!!

        • Bermuda says:

          Lol! I think it means that no bank loan or mortgage was required, not that they showed up to buy the house with briefcases full of cold hard cash (which would definitely raise alarm bells!).

          • Toodle-oo says:

            Huh ? What ?
            If someone buys a house without needing a loan or mortgage , as in it’s simply a matter of transferring the required funds from the buyer’s account to the real estate agent’s/seller’s account, it’s considered a cash transaction , is it not ?

            If someone buys a new car without needing a loan and pays for it in full at the time of purchase is it not considered a cash sale ?

        • serengeti says:

          Buying a house without a mortgage, i.e. cash, does not mean you turn up with a suitcase full of $1 and $5 bills.
          It’s hard to believe if you’re really this stupid.

      • wahoo says:

        Hey, you, get off my cloud.

  3. Sara says:

    Yes, I am sure their are many people in Bermuda with $500,000-$1,000,000 laying around to go and buy a house or land! LMAO Where are all the houses from the no money down that the banks no own due to many people walking out of their houses?