The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Mortgage lending on Grand Bahama has declined by more than 90 per cent, in both volume and value, compared to the pre-recession ‘boom’ years, data obtained yesterday by Tribune Business shows.

The figures, compiled by Bahamian title research services provider, Computitle, shows the extent of the island’s real estate market slump, with the number of conveyances issued down by 63.3 per cent in 2012 compared to 2007.

The data fully supports Tribune Business’s exclusive revelation last week that Grand Bahama’s market for real estate-related legal services was down by more than 90 per cent compared to pre-recession levels, the slump having been driven by a contracting economy and heightened unemployment levels, and a corresponding decline in mortgage lending.

Computitle’s data showed that the number of demand mortgages issued in Grand Bahama had fallen from 216 and 192, for 2006 and 2007 respectively, to just 15 in 2012.

These figures represented volume declines of 93.1 per cent and 92.2 per cent, respectively.

And these percentages were matched by the decline in the cumulative value of demand mortgages issued on Grand Bahama.

Just $1.624 million worth were extended by the banks and other commercial lenders in 2012, compared to $18.779 million in 2006 and $16.277 million in 2007 - declines of 91.4 per cent and 90 per cent, respectively.

The picture was similar when it came to the number and value of real estate conveyances completed on Grand Bahama.

In volume terms, according to Computitle’s data, they fell by around two-thirds- hitting just 605 in 2012, compared to 1,605 and 1,793 in 2006 and 2007, respectively. This translated into declines in real estate transaction volume of 62.3 per cent and 63.3 per cent, respectively.

As for the total value of completed Grand Bahama real estate conveyances, the 2012 figure of $57.719 million was some 78.5 per cent lower than the $268.125 million worth of deals generated in 2007. It was also some 49.1 per cent less than the $113.431 million generated in 2006.

The figures were generated by Computitle’s information database that contains details on all real estate transactions completed, and titles held, in the Bahamas. It includes all the deeds and documents mircofilmed by the Registrar General’s Department pre-2007, plus everything recorded since it switched to a database system that year.

Lionel Haven, Computitle’s chief operating officer, told Tribune Business of the data: “It shows what Terry Gape and Brenford Christie haven been saying. This is factual evidence of their comments.

“Terry is one of the conveyancing attorneys who has been around in Grand Bahama for quite a while, so he knows the market. We have seen this as well, and the statistical data bears this out.”

And Mr Gape, senior partner at Dupuch & Turnquest’s Freeport office, told Tribune Business yesterday of the Computitle data: “It does support my contention that there’s been a significant drop-off in transactions, and a significant drop-off in bank lending.

“I’m not blaming the banks for that; it’s the jobs market where the problem’s at.”

Mr Gape last week that “every law firm” had seen a 60-70 per cent drop in revenues related to mortgage and conveyancing work since 2007, with 90 per cent of those companies forced to downsize staffing levels over the past four-five years.

He was backed by Mr Christie, his counterpart in charge of McKinney, Bancroft & Hughes’s Freeport office, who described the market for real estate legal services as “totally dead”.

Compared to the last little boom before the onslaught of the recession, my estimate is it’s down by more than 90 per cent,” Mr Christie told Tribune Business, “In fact, I’d put it even higher than that - 95 per cent or more.”

But a slightly more optimistic picture had been painted by James Sarles, president of Coldwell Banker Sarles Realty, who said last week that while “it’s not boom time, it’s feeling like there’s business here”.

He added that buyer interest and call volumes had increased since just before end-2012 to levels not seen for three years.

Mr Haven yesterday backed Mr Sarles’s outlook to some extent, indicating that there had been indications of an improvement in the overall Bahamian real estate market during the 2012 second half.

“There’s been an upswing in the latter half of last year,” he told Tribune Business, “but whether that affects Grand Bahama I can’t say.”

Elsewhere, Computitle’s data showed that the number of equitable mortgages issued on Grand Bahama had fallen from 216 and 47, in 2006 and 2007 respectively, to just one in 2012.

As for other charges, liens and encumbrances extended on Grand Bahama real estate, the figures showed that ‘upstamped mortgages’ had fallen by almost three-quarters - declining from 60 in 2007 to just 16 last year.

Further charges, too, were down by 62.3 per cent and 53.7 per cent, respectively, compared to 2007 and 2006 levels.

And other mortgages were down 63.2 per cent compared to 2007 levels, standing at 317 last year compared to 861 then. In terms of combined value, they were down 77.1 per cent, coming in at $30.424 million in 2012 as opposed to $132.767 million in 2007.

Asked what was needed to turn Freeport’s real estate market and, by extension, legal services industry around, Mr Gape said: “If we could get a major investor to create an Albany or Baker’s Bay, which is very easily done in Freeport, as we have the land, the canals and beaches, that would quickly start to turn it around as we’d have a product to show the world.

“Freeport only needs one or two things to happen, then it could turn around. A large resort would go out of business in three months, but a luxury subdivision like an Albany, with a boutique hotel, would be a winner because the market is that ready. But we’re going to miss it again.”