By NEIL HARTNELL
Tribune Business Editor
A leading realtor has described as “crazy” government policies that are stifling the Bahamian economy, warning that previously “gung ho” buyers were now starting to hold-off on purchases.
Peter Dupuch, president of ERA Dupuch Real Estate, told Tribune Business that numerous buyers had begun to ‘watch and wait’, citing uncertainty over the economy and a dislike of government policies towards it.
And he also expressed concern over the obvious slowdown in the Investments Board approvals process for foreign real estate buyers when compared to the former Ingraham administration.
Calling for the Bahamian economy to be “jump started”, Mr Dupuch warned the Christie administration against policies that further restricted the ability of foreigners to buy land in this nation, saying this would hurt Family Island property owners the most.
He was backed by John Christie, vice-president of H. G. Christie Real Estate, who told Tribune Business of possible government policy changes: “Hopefully they’re up to nothing, because anything they do I think will not be good for the market.
“The last government made changes to the Stamp Tax and that didn’t get them re-elected. Anything they do to hinder non-Bahamians buying will harm the market.”
Mr Christie warned that news of such impediments would easily spread via social media and the Internet, threatening to give the Bahamas “a bad name”.
“They need to keep it where it is and speed up the Investments Board approvals,” he added. “Market forces need to be left to do what they do without interference.”
Their comments come on the day Prime Minister Perry Christie, and officials from his office, are due to meet the Bahamas Real Estate Association’s (BREA) Board over potential changes to government policy regarding the sector.
The Government seems concerned that foreign buyers are driving up prices and thus squeezing Bahamians out of the market, denying them access to affordable property.
Based on a questionnaire sent out to BREA members, the Government seems to be assessing whether to increase the minimum $500,000 investment threshold for economic permanent residency, and if it should give foreign buyers a deadline by which they have to develop vacant land purchases.
Mr Christie, though, said the consensus at a BREA meeting held last week was that the Government “shouldn’t mess with it.
“We have a good foundation, let’s keep it where it is, keep the money coming and the buyers coming. People have a world market to buy in, and there’s lots of friendly places to buy in.
“If they choose the route that property valued at under $20,000, $50,000 or whatever can only be bought by Bahamians, any person that owns those lots will be unable to sell them, as there is no one to buy. It makes no sense because it doesn’t help anyone,” Mr Christie said.
“If they think it through, they can’t do anything, change anything, without there being an effect. Bahamians can buy land in the Out Islands for $10,000, but there’s not much demand.”
The Christie administration appears to be trying to find the correct balance, but Mr Dupuch also warned: “They’re stifling the economy so much. It’s crazy what they’re doing, and are hurting the poor guy in the Family Islands the most.
“They should be welcoming and incentivising foreign land purchases in the Out Islands, not stifling it and taxing it to death. The Government should be welcoming people to the Out Islands.
“Look at all the land available, sitting there doing nothing. It’s not like Bermuda where they have no land to sell. We need to develop the Out Islands to stimulate commerce, and stop everybody coming to Nassau.”
The ERA Dupuch Real Estate chief said the islands attracting the lion’s share of foreign direct investment (FDI), such as New Providence and Abaco, were thriving in comparison to the likes of Andros, Mayaguana and Cat Island, all of which were suffering from a lack of buyer activity.
Pointing to the consequences of government policy decisions, Mr Dupuch added: “We’ve been hearing every day: ‘We’ve been looking for six to eight months, and are not liking the way the Government is thinking and the way the economy is doing, so we’re going to hold off a little while and see what happens’.”
He said such buyer sentiment resembled the ‘wait and see’ attitude prevalent prior to the 2012 general election, and added: “This came up only recently.
“I’ve had people backing off who were gung-ho. It’s still OK, but we’re hearing more people saying they’re just watching what’s going on. It’s the comments we’re getting from buyers as to why they’re not purchasing.”
Mr Dupuch pointed out that the 10 per cent Stamp Duty levied on most real estate transactions left the Government as the party making the greatest return from such investments - not the buyer, seller, realtor or attorney.
And he warned about the impact 15 per cent Value-Added Tax (VAT) would have on the real estate industry, given that it would have to be charged on realtor commissions and legal bills.
Mr Dupuch also expressed concern about the Government being “very slow on the approvals process”. He contrasted this to the former Ingraham administration, where “you could get an answer pretty quickly” and e-mail confirmation of Investments Board decisions prior to meetings.
“We found things moved pretty quickly and the right questions were being asked,” Mr Dupuch told Tribune Business. “Right now, it seems like they’re dragging their feet and trying to slow it down.
“It seems the wheels are slowing rather than speeding up. Our economy needs to be jump started right now, not slowed down. They [the current government] just say they don’t have a meeting; there’s no meeting this month, we’ll have to wait until next month.
“These are buyers spending at least $500,000, their life savings, and the process sets a whole feeling about this place - that it takes long to get things done, which is already the perception of island nations.”