The Tribune

By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net REALTORS yesterday gave mixed projections for the 2012 market outlook, some telling Tribune Business they expected the year to be "fairly active" while others suggested indicators pointed to a "slow year". Mario Carey, head of Mario Carey Realty, said: "I think that the real estate market is still challenged by overburdening costs imposed by the Government through stamp duty and real property tax. "I think the banks need to loosen up their lending standard in order to stimulate the market. There's a double negative in that people are not buying because the cost of doing the transaction is too high, and persons can't sell because the transaction cost is too high, and so the market because stagnant." Stamp duty in the Bahamas increased by 2 percentage points across-the-board after the 2010-2011 Budget. The increase applies to all real estate transactions apart from those involving first-time buyers. For property valued between $0-$20,000, the rate has gone up from 2 to 4 per cent; for property between $20,000 to $50,000 it rose to 6 per cent; between $50,000 to $100,000 it goes up to 8 per cent; it is up to 10 per cent for properties between $100,000 to $250,000; and 12 per cent for everything higher in value. Mr Carey said: "I think there is opportunity for improvement in the real estate market if the policies change. I think we are fooling ourselves to think it's going to get any better if we maintain the status quo. If I sell a house to somebody, they're going to need a gardener, a pool maintenance man, repair man, housekeeper, mechanic, insurance, etc. so there's a whole domino effect. I feel that we will survive but we can do better." Mike Lightbourn, head of Coldwell Banker Lightbourn Realty, told Tribune Business: "I think that it will be a good year. Hopefully it will be better than last year. There is some activity out there." Mr Lightbourn, while describing the real property tax and stamp duty as a "nuisance", said he did not feel it was as great a deterrent as some made it out to be. "If someone needs to sell and someone wants to buy, they're going to get it done. I don't think it's as big a deterrent as some make it out to be, but it is a nuisance," he added. William Wong, former Bahamas Real Estate Association (BREA) president and head of William Wong and Associates Realty, told Tribune Business that indicators suggest 2012 will be a slow year for the real estate industry. "All indicators suggest that it's going to be a slow year for us. I don't see much changes right now. Perhaps when the elections here in the Bahamas and elections in the United States are over there may be some changes in the market. I don't see any signs of these improving in the next six to seven months, but hopefully I'm wrong," he added. Mr Wong said the Government must give Bahamians incentives to purchase property. One way of doing this, he said, would be by making it cheaper to do so by reducing the Stamp Duty. "It would certainly help. I don't think that the Government should raise taxes when we are going through a downturn in the economy. If you are charging a person 1 per cent, that can be used for other things like legal fees, for instance, instead of going into the Government's coffers," he added. George Damianos, president and managing Broker of Lyford Cay Properties Sotheby's International Realty, and Damianos Sotheby's International Realty, told Tribune Business: "I think this year will be fairly active. It will probably keep pace with what happened in 2011. I don't think it's going to take off, but I don't think we are going to be in the doldrums. We are heading into an election year; both the Bahamas and the United States, and some will want to wait and see what happens." With regards to the Stamp Duty issue, Mr Damianos said: "It is what it is." He added: "I don't think it has affected our business. We deal on the high end. Our average sales price is $1.3 million. I don't think there's many other real estate companies that deal in that range."