Coldwell Banker Real Estate Market Update

January 9, 2017

“Demonstrations and political unrest throughout the 2016 calendar year have caused some potential purchasers [both Bermudian and Non Bermudians] to reconsider their desire to make such a huge financial investment in Bermuda,” Coldwell Banker Bermuda Realty said.

Real Estate Bermuda TC January 9 2017

In their latest real estate sales market update, the company said, “In July 2016 we reported that, for the third consecutive year, the real estate industry had seen an increase in the number of Bermuda property transactions. We anticipated that the total sales for 2016 would exceed 2015 levels by 10-15%.

“However in calculating the total closings for the year, current figures stand at 218, and with an approximate six month delay in government records we believe that the annual total will reach 300, on par with last year.

“The licensing regulations for Non Bermudians and PRCs were unchanged in 2016 and remain at 8% [houses] and 6% [condos] for Non Bermudians and 4% for PRCs, hence, we are seeing marginally more license applications for purchase.

“Previously, license approvals were taking on average 6-9 months; we have now been informed by the Minister of Home Affairs office that this process should take only 6 weeks if the application is complete when submitted.

“While encouraged by the robust start to 2016, demonstrations and political unrest throughout the 2016 calendar year have caused some potential purchasers [both Bermudian and Non Bermudians] to reconsider their desire to make such a huge financial investment in Bermuda.

“2016 has seen some interesting shifts in the market. Although prices have not risen significantly overall, we have noted that inventory, priced correctly, is selling more quickly and in some cases, getting multiple offers.

“In fact, 24% of the property transactions that Coldwell Banker Bermuda Realty was involved in for the calendar year of 2016 sold at or above the asking price. This is significant considering that the majority of sellers put their property on the market with price negotiations in mind.

“Well-presented properties, in a desirable neighbourhood and priced correctly, often have an accepted oVer within a week or so. This means that it is imperative for buyers to have a pre-approval letter in hand when starting the property search. As with 2015, in 2016 we have seen about one third of purchasers in a strong cash position.

“Average prices of sold property are as follows: single family dwelling @ $1,207,000; condos @ $681,000; vacant land @ $366,000. Single family homes accounted for 28% of our sales, whereas 22% of our sales resulted from the condominium market, the remainder of sales included land, commercial, and multi-family dwellings.

“Overall, current inventory is limited and we are having some difficulty meeting the demands of potential purchasers. In particular we have buyers looking in the $1 – $3.5M bracket. Buyers are very discerning and are looking for move-in ready homes; hence, staging a property to show and photograph well is critical.

“There is still a layer of over-priced property on the market that has not seen significant interest. Additionally, there is limited demand for multi-unit dwellings and “fixer-uppers”, but sales of vacant land have seen a resurgence in the past two years.

“The benefit of the America’s Cup has been tangible in Bermuda, particularly tied to an increased disposable income and exposure of Bermuda for longer term growth. The impact of the 2017 event on real estate has been positive in that residential rental product in the West End has been more buoyant.

“The expectation for the remainder of 2016/17 is for short term rental opportunity.

“Average prices for residential rentals are up by approximately 10% over 2015 figures – 1 bedroom @ $2,400; 2 bedroom @ $3,300 and 3 bedroom @ $5,500. If we extract figures for City Living apartments, the one bedroom average is more in line with market expectations @ $1,800 per month.

“Days on market for rental property have remained consistent this year with property listed with Coldwell Banker Bermuda Realty for rent on average of 59 days.

“Our commercial representatives report that there is continuing demand from some biotech and ILS startups; some growth in the Trust sector and general movement to quality office space.

“The majority of demand is in the western part of Hamilton/Pembroke for [in] better quality buildings/spaces that have good natural light/views, are already fit out, ADA compliant, have wet sprinkler systems, LED lighting, up-dated/energy efficient air-conditioning , gyms, showers, etc.

“Most of the demand is in the 500 – 4,000 sq. ft. range with occasional requirements up to 20,000 sq. ft. Tenants are shying away from multi-floor operations wherever they can.

“Many Landlords are continuing to offer various forms of creative incentives to entice potential occupants to their buildings. Some owners who have not invested to up-grade the infrastructure in their properties have found it difficult to fill vacant space.”

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Comments (30)

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  1. San George says:

    We who own property are reconsidering our positions as well. A group hell-bent upon driving thru Pahtways to citizenship, an airport, and who the pastor of St. Paul will be should frighten any owner or potential owner.

    • jt says:

      In terms of property assets those don’t frighten anyone, regardless of one’s view on each of them.

      • So just like every other country where wealthy people throw their money around, treat de working class people like S!@# and if they resist I’ll take my money and exploit some other desperate country that will submit to exploitation.

  2. watching says:

    Propaganda.
    Election coming.
    Another article I read this morning says that December was out of this world for property transactions.
    Caldwell Banker, please don’t get caught up partisan politics.

    • Politiricks says:

      No it’s true.

      I know of several people who decided to pull out of transactions because of the political unrest and the constant threats of civil unrest and violence.

      So actually it’s very much true. People don’t want to invest their hard earned monies to watch their assets (i.e. house in this case) be devalued due to potential political/civil unrest.

      Many individuals look upon their friends and relatives who bought during 2004 to 2008 and see the extreme levels of negative equity they now have to deal with due to the significant downturn in housing values from that time till about 2013/14.

      No one wants to put their dollars into a vehicle that could ultimately see them lose everything due to politics.

      No too sure why people can’t seem to believe that the perpetual threats of unrest and violence would be a massive deterrent for bot h local and foreign investors alike. There are reasons the most volatile regions in the world tend to be the poorest as well.

      • Yet but in other countries where political figures are being kidnapped and murdered they are bying up property.
        Bermudians already fell for 1998 IB companies will leave.
        Well some fools will still fall for this.

        • jt says:

          It took time but eventually it played out. The question about the plp for the next election is will it play out again and how long will it take?

        • Truth (Original) says:

          A bunch did leave. Or haven’t you noticed?

    • jt says:

      This does seem dubious. Pretty hard to verify beyond what seems like a few clients expressing concern. There will be a tipping point, however.

    • dan says:

      Spoken by someone who mustn’t own real estate. People are running the risk of watching everything they own get devalued.

  3. smh says:

    Yup. We have been talking about selling up before the next election because everything will be devalued again if the PLP get back in. So far all they have offered no solutions to our problems only criticisms and revolt. Investors are nervous now and a lot of companies have back up relocation plans just in case.

  4. Izzypop says:

    Sad. We too are considering selling our home and moving overseas
    Seems some aren’t welcome on their own island anymore.

    • Attitude Of Gratitude says:

      Leaving was the best move I made for both me and my children’s future! Its tough to adjust to a new country at first but if you do the research and are willing to work hard its totally worth it! I mean…why invest in and live somewhere your not gonna be treated with common decency?

      But I get it! That’s just life right now in Bermuda. I’m sure things will change for the better one day…I respect those willing to stick it out and work towards that better future!

      Best of luck

      • Good I wish more off you will leave.

        • bdaboy says:

          “Good I wish more off you will leave.”

          so you can get back to fishing and picking lilies?
          You’re so blinded by your bigotry, OJ….you’re a sad little cretin.

    • property owner says:

      I will not sell my home I can get more from renting and live comfortable anywhere in the world all this hype and bull you all know Bermuda is heaven I hate the B.S. that’s spreading look at the many peeps still coming here to live

  5. Toodle-oo says:

    *“In fact, 24% of the property transactions that Coldwell Banker Bermuda Realty was involved in for the calendar year of 2016 sold at or above the asking price. This is significant considering that the majority of sellers put their property on the market with price negotiations in mind.*

    Another way to put it is “76% of people did not get what they wanted in their attempt to milk potential buyers .”.

    And further ..

    *“Not only have they rented properties where they had difficulties in the past, they can rent them at good, fair market value.”*

    Take advantage of it now landlords with the overpriced rents , because as soon as the AC is over your places will be empty again and will remain that way with the prices that you’re asking for them .

    As a few AC people have said to me , there’s no way in h**l that they’d come out of their own pockets for the rental prices here .

    *“Average prices for residential rentals are up by approximately 10% over 2015 figures – 1 bedroom @ $2,400; 2 bedroom @ $3,300 and 3 bedroom @ $5,500.*

    This is , for lack of a better word , obscene . How on earth is a regular working class person supposed to get ahead and save a little and still lead a normal life with these prices ?
    Is it any surprise that we have one of the lowest home ownership percentages by population of any place on earth and so many people struggling to get by ?

    • Onion says:

      If you were selling a house would you want to get maximum value for it or would you sell it at a discount to what you could get?

      • Toodle-oo says:

        I’m sure that if I or anyone else was selling a house , or anything , we’d try and get the maximum value for it . The thing is , if I buy a car or a bike or a boat or a stove or a fridge or a camera or a watch it depreciates in time . Hell , even our money in the bank is becoming more and more worthless but people who buy real estate have totally unrealistic expectations that the property will continue to go up and up and up all based on this false economy that we have that is based around houses and land.
        If someone buys a house to live in forever what worry is it of theirs if the value changes , up or down ? If they want to sell and the market has gone up or down that’s on them .

    • Hell Year 2017 says:

      Who the fish is renting a 1 bedroom @ $2,400 that’s just ucking greed.

      • Hell Year 2017 says:

        & if you paying that you’re a ucking clown. 1 bed $1800 max. Tell your landlord drop the rent or U moving outtyyy.

  6. Terry says:

    Bermuda has never suffered like other nations.

    Never suffered anything comparable to poverty and infections and death.

    Shut up you fools.

    Enjoy and share.

    Shalom.

    • Attitude Of Gratitude says:

      No but they suffer plenty of fools like you! Do a bit more thinking before you type!

    • Triangle Drifter says:

      Rents & property values may be on the recovery but they are nowhere near what they were pre 2008. Meanwhile insurance, tax maintenance cost have continued to increase. Those costs never took a drop.

      If you think that buying & then renting it is so good try doing the math & see how much has to be come up with to cover the shortfall on what the rent brings in.

      Better off investing on Wall St.