By NEIL HARTNELL
Tribune Business Editor
The real estate market needs its Bahamian “bread and butter” buyers to return if it is to mount a full recovery, a well-known realtor yesterday suggesting it was becoming increasingly difficult for locals to afford homes.
Peter Dupuch, ERA Dupuch Real Estate’s president, told Tribune Business that his agents were having “to work twice as hard” given that many sales in the ‘Bahamian market’ were falling through because buyers were unable to access mortgage financing.
Mr Dupuch added that data from the Bahamas Real Estate Association’s (BREA) Multiple Listing System (MLS), and figures on completed conveyances from the Ministry of Finance, suggested the market was still off by around 25 per cent.
“Luckily, my business has held its own,” he said. “We’re not down 25 per cent, but the overall market is down because Bahamians are not buying homes.
“They don’t have the money, and the banks aren’t lending. By the time they go through all the jumps and hoops demanded of them, Bahamians just can’t afford it and they’re not buying homes.”
Mr Dupuch implied that the Bahamas is currently facing a ‘two speed’ real estate market, with the ‘Bahamian’ or local segment continuing to struggle, while the international or foreign side continues to enjoy the bulk of the activity.
Suggesting that little would change in 2016, the ERA Dupuch chief told Tribune Business that foreign purchasers were not affected by the Bahamas’ general “economic malaise” that was impacting locals.
He added that international buyers were also not being put off by Value-Added Tax (VAT), and were purchasing second and third homes in gated communities to ensure they were safe from escalating crime levels.
“It’s not getting any better,” said Mr Dupuch of the local market, “and I don’t see the Government doing anything to stimulate the economy. If we had a 25 per cent drop in the US housing market, there’d be an uproar.
“Nobody seems to be concerned about this. For Bahamians it’s too cost prohibitive, there’s too much red tape and the banks aren’t lending.
“My business is doing well because we have good agents, and offer good products and services, but we’re working twice as hard. A lot of sales are falling through because buyers can’t get bank financing,” he added.
“It’s just the general malaise in the Bahamian economy. The foreigners are not feeling that as bad as the Bahamians.”
While real estate prices in gated communities had increased due to the demand, Mr Dupuch said it remained “a buyer’s market”, with prices in some areas down 20-40 per cent compared to where they were three years ago.
“Eastern Road and all the way down there is very, very flat,” he added. “Something needs to be done to stimulate people to buy homes. The Stamp Duty exemption for first time buyers was good, but there’s so much red tape there now.
“It’s just so difficult for Bahamians to buy a home now. I guess we all have to work harder, as we have, to reach out to the foreign buyer that’s out there.
“But we need the locals. We need the ‘bread and butter’ for our economy. The foreign comes in, buys or builds a home, and hires workers, but they’re not a Bahamian who will be here forever. I’m here for life, and we need more people looking for and buying homes.”
Mr Dupuch’s assessment was backed by Michael Lightbourn, head of Coldwell Banker Lightbourn Realty, who told Tribune Business: “I think the market will be pretty much the same as last year, which is basically a relatively strong foreign market and a relatively weak local market.
“There’s areas of strength, and many areas of weakness.”