Real estate sales show two-tiered market continues

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Real estate sales data for the 2019 first half continues to show a two-tiered market, as the lower and middle class segment continues to struggle while the upper end surges.

An analysis of Multiple Listing System (MLS) data by real estate firm, Engel & Volckers (Bahamas), said access to mortgage financing and the ability of borrowers to meet more stringent lender demands would continue to dictate the strength of the market for New Providence properties priced between $100,000 to $500,000.

This is the segment dominated by the Bahamian lower and middle class, and Engel & Volckers said: “Lending will continue to be the main factor determining how well this market performs.

“This is primarily a local market relying on mortgages. Improved data supporting lending, appraisals and property tax structures can help stimulate confidence by establishing a more accurate baseline of values to support confidence in lending practices.”

The outlook changes significantly, though, for New Providence properties priced at $500,000 and up. This market segment is dominated by upper middle class and high-end Bahamian buyers, together with wealthy expatriates and second home purchasers.

Engel & Volckers said some 900 new units between the $500,000 and $2.5m price points are set to be released on to the market via the residences at Baha Mar’s Rosewood and SLS resorts, along with developments such as One Marina at Palm Cay, Hurricane Hole on Paradise Island, the Residences at Goldwynn and The Pointe.

“These projects are all new, modern and amenity driven with prices competing with the already established market,” the realtor added. “These project sales are not reflected in MLS data, and in most cases are in the early contractual stages with their buyers.

“Sales will not complete for a period of time pending the final completion of each project. These projects should affect the market in this price range for the next 18 to 24 months.” As for properties priced over $2.5m, Engel & Volckers added that investors will continue to view The Bahamas “as a viable lifestyle opportunity” provided there are no changes to its investment climate.

While MLS data does not capture every property deal in The Bahamas, it represents the largest collection of current, accurate information on how the real estate market is performing. Engel & Volckers said the figures showed there was “steady growth” in the 2019 first half with average sales prices up from $349,812 in 2018 to $470,979.

“The total sales volume is $99.848m, which is slightly ahead of the 2018 total sales by about 5.7 percent,” the realtor added. “Total units sold had decreased, and the median sales price has decreased from $310,000 to $270,000. Average days on the market for properties closed decreased from 337 for 2018 to 300 for the first half of 2019.”

Abaco was described as “a hot spot, with an average sales price of $456,589 that was up just over 2 percent from 2018. “Treasure Cay, Elbow Cay and Green Turtle Cay all had significant increases in average sales prices, with Treasure Cay having the biggest from $370,600 in 2018 to $445,972 in the first half of 2019 or a 20 percent increase,” Engel & Volckers said.

“On New Providence, the Cable Beach sub-market including Sandyport showed an increase of 9.6 percent on the average monthly rental up to $3,397, and was right on target with 2018’s gross yield performance of 8 percent. Paradise Island, which is usually one of the more active markets, had a very sluggish start to 2019 with total sales and the average sales price well below 2018 averages.

“Overall on New Providence and Paradise Island, there were 103 residential unit sales with an average sales price of $562,293. The unit sales are well ahead of the total unit sales for 2018, but the price point has decreased significantly from $806,842.67 in 2018 to 562,293 in the first half of 2019.”

Eleuthera, meanwhile, said a 33 percent increase in its 2019 first half average sales price to $424,850 even though sales volumes were well off 2018’s pace.

“The biggest real estate growth opportunities exist in the Family Islands,” Engel & Volckers said. “Exuma, Abaco and Eleuthera benefit from airlift, amenities and lifestyles that support a strong rental market lifting property values.

“The announcement of new developments and airlift in Grand Bahama, Long Island and Cat Island present early opportunities to invest in a potentially growing market.