By Annelia Nixon

Tribune Business Reporter

anixon@tribunemedia.net

Cat Island is yet another destination suffering from an affordable housing shortage as landlords increasingly invest in the short-term vacation rental market, a local realtor is warning.

Nikita Shiel-Rolle, a realtor with Christie’s International Real Estate, told last week’s Cat Island Business Outlook that the lack of air connectivity to the island compared with destinations such as Exuma and Eleuthera was also leading to slower growth because potential second home buyers have difficulty accessing the island.

“The majority of the buyers that are coming to Cat Island are buyers looking to invest in vacation rentals,” she said. “So there’s no surprise that our hotels are struggling with that because the main buyers that I interact with are vacation rentals or people who are looking to invest into a boutique resort.

“And the vacation rental market is, of course, also creating challenges for the local rental market. This is not unique to Cat Island, but there is a need throughout the country, especially in high tourism density areas, that there’s a focus on affordable housing for local communities.”

Ms Shiel-Rolle added that Cat Island is “slower” than other island real estate markets, even as The Bahamas is “moving into a buyer’s market”, because there is “less inventory available” on the island. She explained that the lack of airlift has contributed heavily to this.

“This is also one of the realities for people who are looking to buy second homes,” she said. “Cat Island is not a convenient place to get to. You have to want to come to Cat Island. And so this is something that is important for us to take into consideration as we are developing our island.”

Also speaking at the Cat Island Business Outlook, Sarah Swainson, private charters and business development manager for Makers Air, said the airline hopes to begin in February a trial where a twice-weekly 3:30pm flight from Fort Lauderdale Executive Airport into Cat Island returns at 7.30am the following morning in a bid to improve the island’s air connectivity.

Ms Shiel-Rolle said closing real estate transactions can take up to nine or more months, especially if one party needs Bahamas Investment Authority (BIA) approval. She added that infrastructure is a problem.

“One of the limiting factors to development, as everyone knows, is our infrastructure,” she said. “It’s also part of the charm so it’s a bit of a ‘catch 22’. The more that we can improve our medical services, access to water, electricity, roads and airlift, Cat island will become more of an attractive offer for investors. But at this point, we are where we are. And so slowly we move forward together.”

Ms Shiel-Rolle said real estate transactions take so long in The Bahamas partly because there is no land registry yet. “Ryan Pinder gave a talk the other day about the consultation on the land reform,” she added of the Attorney General. “We know this is going to take a really long time, and especially in an island like Cat Island where we have so many areas of land that do not have a full, clear deed and title.

“This is going to be a long process. Many governments have begun the process of trying to understand land reform. And just to provide a little bit more context, one of the reasons why real estate transactions take so long in The Bahamas is that we do not yet have a land registry. And so that means the attorney that’s supporting the buyer has to do due diligence to ensure that the deed is actually free and clear, and is a property that can be sold.”

Ms Shiel-Rolle stressed the importance of appraising a property’s value before purchasing it as well as checking with the Department of Inland Revenue to ensure there is no unpaid real property tax, VAT or other liabilities on it.

“I highly encourage anyone who’s considering buying property or selling property that you want to make sure that you get an appraisal. Getting an appraisal for your property not only gives you a true understanding of market value, but it really helps you with being an informed buyer or an informed seller,” she explained.

“One of the challenges, historically, that we’ve had in Cat Island is just because it is a slower market, it’s sometimes a bit harder to have appraisals that are true. And so a lot of the Cat Island real estate is higher priced, and it takes a longer time for those prices to drop or then, eventually, a sale and a transaction to go through.

“And part of that is that it is expensive building in Cat Island. So, you know, when you are building, there’s just so much that goes into that building. However, everything that we put into our buildings and our property doesn’t always translate to the market value. So having a recent appraisal is critically important,” Ms Shiel-Rolle continued.

“And then also, if you maybe built your home 30 years ago before all the evolution in our tax processes, you want to make sure that you’re checking with Inland Revenue. Make sure that you’re actually paying the correct amount of property tax. Are you just paying property tax on the land, and maybe it hasn’t accounted for the actual building that has now been constructed?

“So having a check with Inland Revenue to make sure that your property tax is up-to-date is going to be extremely important, especially if you’re looking to sell because all your taxes have to be current in order for your property to sell.

“Additionally, if you are in the vacation rental market, now they’ve streamlined the process for you to register. Just make sure if you are in the vacation rental market that you’re registered with Inland Revenue and that you are also accounting for the VAT on your rentals, which does not automatically happen for you.”