The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government has been urged to give the real estate market a ‘three-year grace period’ to adjust to the new $1 million permanent residency ‘fast track’ threshold, a realtor saying it was “amazing” that no one in the industry seemed to have been consulted on the move.

Mario Carey, chief executive of Better Homes and Gardens MCR Bahamas, told Tribune Business: “There are many projects that base their model on that $500,000, and the market absorption has been soft, so to jump to $ 1 million is a challenge.

“Maybe it’s something the Government can look at and say that maybe in the next three years we are going to phase in this $1 million, so that developers planning their projects, and people with ideas on the drawing board, can start adjusting their product.”

Mr Carey added: “What happens is a lot of times governments make decision without consultation with anybody. I haven’t found anyone in the industry that they spoke with; nobody, no advice from any real estate professional, which I find to be amazing.”

Hope Strachan, minister of financial services, last month announced that the Government planned to ‘increase’ the investment threshold for accelerated permanent residency consideration from $500,000 to $1 million.

She told a Higgs & Johnson seminar that Cabinet had given permission to double the threshold, saying: “This threshold is no longer achieving the intended objective, which is to attract high net worth individuals to our country and to support the real estate market in a tangible way, while maintaining the integrity and profile of the Bahamas as a premier financial centre.”

Developers and realtors, though, are especially concerned with both the potential change and how it is implemented, given the importance of the second home market to their industries and the wider Bahamian economy.

Mr Carey told Tribune Business that the real estate sector has been trying to improve since the 2008-2009 recession, estimating that price points during that period dropped as much as 40-50 per cent.

“We’re down maybe 20-30 per cent now. We have seen some correction in price,” he said. “That means that demand has been picking up. It is still a buyer’s market because there is still a lot of inventory.

“The fact is that the banks are eager to lend but it’s still hard for many people to qualify,” added Mr Carey.

“Within my circle in the luxury market, people are very positive that Donald Trump, as the new president, will have a very strong impact on the real estate market because people, when they pay lower taxes, can have more disposable income.

“People like real estate. Any government has to be careful with the policies that they put in place and not increase the cost of transactions. We know that every property that sells in the Bahamas creates a minimum of three full-time jobs. Real estate can become the first, if not the second, pillar of our economy if handled correctly. It needs to include everyone, Bahamians and not just foreigners.”