By NEIL HARTNELL
Tribune Business Editor
A well-known realtor yesterday said his reliance on luxury international purchasers has grown to 80-90 per cent of his sales, telling Tribune Business: “It’s almost like the Bahamian buyer has disappeared.”
Ryan Knowles, an agent with H. G. Christie, said his business had changed dramatically from a previous 50/50 split between international and Bahamian buyers, describing the change as “a tale of two markets”.
While the high-end, luxury market was “performing really well”, due to Europeans and Canadians relocating to the Bahamas for tax reasons, and Americans seeking offshore investments, Mr Knowles described the Bahamian market as “flat” at best.
The reasons for the divide are not hard to spot, and chiefly relate to the Bahamian economy’s persistent softness and relatively high unemployment levels.
With almost $705 million worth of mortgages, according to the Central Bank, either in default or non-performing as at end-August 2014, commercial banks have become much more reluctant to grant home loans.
With the criteria to qualify for a mortgage much more stringent, fewer Bahamians are able to realise the home ownership dream. And with Bahamian commercial banks suffering reduced bottom and top lines, due to increased provisioning and credit write-offs, and borrowers failing to repay, respectively, there are fewer dollars available to lend.
“I get asked a lot about this, and it’s really a tale of two markets,” Mr Knowles told Tribune Business.
“The high-end market is performing really well, being driven by the global super rich moving here for tax reasons, getting out of Europe and Canada. Americans are also looking to invest outside the US.”
But, when it came to the Bahamian side of the real estate market, he added: “It’s very hard to access credit. It’s very difficult to qualify for a mortgage.
“It’s almost like the Bahamian buyer has disappeared..... I think there’s still demand from the local economy, but it’s very difficult to qualify. People don’t have the funds to put down as deposits. It’s almost like Bahamian buyers are being squeezed out a bit.
“The local market is very flat. If you talk to any number of realtors, they’ll tell you the same thing. I hear it every day from them. Most of the activity is in the high end.”
Mr Knowles told Tribune Business that the ‘two speed’ market had caused a significant adjustment in the split between the international high-end/local clients that he served.
“The luxury market is now 80-90 per cent of my business,” he disclosed. “Previously I would say it was 50/50, right down the middle.
“For me personally, throwing off the high-end market, it would be very difficult, very tough if I had to rely on the local market.”
Mr Knowles said high-end Bahamian real estate was proving especially attractive because it is priced some 75 per cent lower, on a per square foot basis, than similar properties in London and New York.
“New York, London, real estate is almost out of control at $4,000-$5,000 a square foot,” he added. “Come here, and they can get a beautiful apartment on the ocean, with all amenities, for $1,000 a square foot. For them, it’s a bargain, a great deal.”
Mr Knowles said the recent Ocean Club Estates penthouse sale that he closed, for a two-year record price of $6.1 million, came in at S1,356 per square foot.
He described this as “a really great price for a resale property”, with the buyer a European seeking to relocate to the Bahamas for tax purposes.
Mr Knowles likened sales activity in Ocean Club Estates during 2013 as the “busiest year since 2008”, with 2014 continuing this trend and producing “more of the same”.
“Buyers are making decisions a bit quicker than a couple of years ago,” he added. “They come in knowing what they want, and if they find it they pull the trigger. The confidence has come back, they’re looking for opportunities and they love the Bahamas.”