Foreigners take greater real estate market share

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamians are conceding an ever-larger share of the real estate market to foreign buyers, one well-known developer yesterday revealing that 100 per cent and 90 per cent of purchasers at his latest two projects were from overseas.

Jason Kinsale, principal of Aristo Development, the ONE Cable Beach developer, said the trend highlighted the “different motivations for purchasing” among Bahamian and foreign buyers.

With the latest developments surrounding the $3.5 billion Baha Mar project further unnerving Bahamians and adding to the general economic uncertainty, many are shying away from real estate purchases.

Mr Kinsale, though, said this was not the case with foreign buyers, who are driven by strategic reasons such as tax and estate planning.

With 28 of ONE Cable Beach’s 69 units already sold prior to the recent construction start, he revealed: “We’re 100 per cent foreign buyers. A lot of them have based their decision to purchase on the requirements for permanent residency.

“The Bahamian market has really been affected. It’s unfortunate. I believe the foreigners see value, and make their decisions to purchase, but Bahamians are waiting to see what happens with Baha Mar.

“We’re seeing the same thing at Balmoral,” Mr Kinsale said of his other, Sandford Drive-based, development. “We’re probably 90 per cent foreign now.

“Foreign investors are looking at the 50 per cent income tax savings, and are not so concerned about Baha Mar and what’s going on in the local economy. They have different motivations for purchasing

“Of course, Bahamians think more foreigners are buying their land. But Bahamians can buy, too. I want to see as many Bahamian buyers as possible.”

With $500,000 set as the threshold for permanent residency based on property purchases, Mr Kinsale said European and Canadian buyers were viewing the Bahamas as a key location for tax minimisation and estate planning purposes.

As a result, they were less likely to be put off by Baha Mar’s woes, even though the mega resort property is located just up the street from the $40 million ONE Cable Beach.

“Obviously, I was very concerned,” Mr Kinsale told Tribune Business of Baha Mar’s Chapter 11 filing. “You don’t really have a true assessment of the market until you’ve spoken to the clients and got their feedback on the situation.

“Fortunately, this was not a global issue, as I had experience of the fall-out in 2008 with Balmoral.”

With his international buyers viewing Baha Mar as a local, Bahamian problem, he added: “They all feel the opening is imminent, although they’re not sure when. They know it will open eventually.

“There’s only one project going up on Cable Beach right now, so there’s not a lot of competition.”

While it broke ground three weeks ago, Mr Kinsale said ONE Cable Beach would have its formal opening ceremony in two weeks’ time.

“Mosko has been mobilised. They’re on site now. We’ve moving forward, and the trucks are moving,” he told Tribune Business.

“The one thing I tell people as well: This is a smaller project than Balmoral. That was 300 units over 43 acres. This is 69 units over 3.2 acres, so it’s a much more manageable, comfortable build-out, a smaller, much more manageable site. It’s a much easier undertaking.”

As for his $3,5 billion neighbour, Mr Kinsale added: “I think we’re all confident in Baha Mar’s ability to move forward eventually. They’ll get through it.

“There’s really no choice in the matter. They just have to get it done. There’s too much at stake.”

Comments

crabman says...

Sunshine Boy's where is your money???????????????

Posted 15 July 2015, 1:18 p.m. Suggest removal

asiseeit says...

You think Albany, Old Fort, Lyford would be possible without foreign money and buyers? Old news, Bahamian land would cost nothing if it where not for the Foreign man buying it up.

Posted 15 July 2015, 1:43 p.m. Suggest removal

Chucky says...

Mr Bigshot talking like he's really behind his developments, but truth is he's the little front boy for some big numbers money.......even his partner from the USA aint injecting nutting much, it's the numbers guys and therefore it's being developed via profits off the poor!

Posted 15 July 2015, 2:44 p.m. Suggest removal

TheMadHatter says...

Bahamians selling land for food. An old story.

**TheMadHatter**

Posted 15 July 2015, 2:54 p.m. Suggest removal

Hogfish says...

what mr. kinsale conveniently yet consistently forgets to mention is that it is not a level playing field.
He likes to talk and say that he wants to see more bahamians buying. Not for any fault of his but how many Bahamians could afford 1/2 million dollars for a 2 bedroom condo?
I don't know many at all but that's just me cuz i een no bigtimer.

BUT
the main issue is foreigners can get MUCH cheaper financing back home (AND HERE!.)

First - An american could borrow money against his home(s) in the states at 2-3% and use the money over here to buy their 2nd or 3rd property.
Bahamians are disadvantaged in their own market when they get ass-fucked by the canadian banks at 7-8% !! (Best 6% if you a lawyer and is pals with a bank manager).

But not only that i've been told you have banks HERE that was offering mortgages in US dollars **for local property** at also rates of 2-3%!!.

Rates that are not possible for Bahamians because we can't have US dollar.

Yes my brothers and sisters, it is cheaper for a foreigner to buy land here than it is for us.

Bahamians get fucking swing bey.

Posted 15 July 2015, 3:45 p.m. Suggest removal

newcitizen says...

You are entirely right. Even Bahamians who are well qualified for mortgages get taken to the cleaners by lenders.

Posted 16 July 2015, 5:04 p.m. Suggest removal

Greentea says...

Foreign buyers with no real benefit to the country- but with residency status in return. I wonder if they tend to pay their real property tax? If that other development on the Cable Beach strip is any indication, these buyers rarely spend any time in these stand alone places- ghost towns. Its a little different in a community like Albany or Lyford where they come in and can hob nob with the celebrities, but not much. Though we see this kind of thing happening in London, NYC and Miami- rich foreigners buying and leaving buildings empty for most of the year, its different in a place like the Bahamas. The locals feel it more. I am told the entry to Albany is ten million. I used to roam out there for free when I was a child. Some good coco plums used to grow out there. Now the the land worth 10 million and a person like me need permission to enter.

Posted 15 July 2015, 3:49 p.m. Suggest removal

newcitizen says...

How does this not benefit the country? Those owners just put $500,000+ into the Bahamian economy. That money is going to pay for the labour of construction companies, the fees for building permits and electrical and plumbing connections, the real property tax, which is higher to foreign owners than Bahamians. They fly down and pay the airport taxes, rent cars and buy groceries when they are here. What does it matter if they stay for one week or the whole year?

Posted 16 July 2015, 5:02 p.m. Suggest removal

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