By Neil Hartnell
Tribune Business Editor
Bahamian realtors are optimistic that this year’s growth momentum will translate into an even better 2019 despite regulatory headwinds and missed sales targets for some.
George Damianos, president of Damianos Sotheby’s International Realty, told Tribune Business that his firm had failed to match 2017’s 20 percent sales volume growth by producing just a five percent increase for the year to end-November 2018.
Acknowledging that this nevertheless represented progress, Mr Damianos said he felt The Bahamas’ had too often got it sales pitch to international buyers back-to-front by promoting its various residency tools ahead of the actual real estate product.
“Thank God we’re up a little bit for 2018, although not as much as I’d like to be,” he told this newspaper. “I’m pretty optimistic 2019 is going to be good. I don’t see any indication it won’t be or anything on the horizon that will put a curb on the momentum we have.
“I don’t think it’s overwhelming, but if we can close off 2018 and are up slightly in 2019, we will be fine. We didn’t have quite the growth we’d like to have had in 2018. Our growth did not match 2017’s growth, but we were still up on 2017.
“We ended our year-end to November up about five percent over 2017. We were up 20 percent in 2017. We were hoping to match that but we didn’t. It is positive, and that’s the way we look at it.”
Mr Damianos, whose firm focuses on higher end properties often geared towards international buyers, said The Bahamas needed to change its approach when seeking to attract the elite purchasers.
“We’re not getting more people for residency,” he told Tribune Business. “That’s drying up, slowing down, and I think we’ve focused on the wrong end of the foreigners buying and moving to The Bahamas.
“We put residency first, but it really is we have people wanting to buy into our tropical climate in proximity to the US and, in turn, they want to know how to stay in The Bahamas. That’s the way we want to be for sure.”
Mr Damianos warned that the Bahamian real estate market also faced potential “stumbling blocks” from sudden, unexplained hikes in real property tax bills that were again impacting foreign owners in the Family Islands plus the uncertainty surrounding the enhanced Know Your Customer (KYC) due diligence the sector is expected to undertake on its clients.
Warning that “we will definitely have some reaction and headway getting buyers to purchase in The Bahamas” if they are confronted with this, the Damianos Sotheby’s principal said such concerns could be offset if the Government became more efficient with its approvals processes.
“Our entire lives are based on word of mouth,” he told this newspaper. “If someone says to you, Neil, there’s a new restaurant open on the corner of Shirley Street and Mackey Street that has great food, impeccable service, that’s word of mouth.
“If you have someone say I’ve tried a new restaurant on the corner of Shirley and Mackey Streets, and the food was horrible and took three hours to be served, that’s word of mouth. I think The Bahamas needs to start focusing on the word of mouth.
“We need to be performing. We can go around and spend hundreds of thousands with tourism and financial services to promote The Bahamas, but we need to bring them here and they’re able to open a bank account and get the permits they need so they don’t say: ‘Don’t go to The Bahamas. It takes for ever’.”
Mario Carey, founder of Better Homes and Gardens Real Estate MCR Bahamas, told Tribune Business that limited supply meant real estate prices in close proximity to the coast had increased by between 15-20 percent in 2018. And beachfront properties “may be 50-60 percent up since the crash” of 2008-2009.
While strong US economy continues to bode well for The Bahamas, Mr Carey expressed concern that the Organisation for Economic Co-Operation and Development’s (OECD) targeting of this nation’s economic permanent residency product could deter international buyers.
“My concern is how we’re being bullied by the OECD with the blacklisting, and how that’s impacting us,” he said. “It’s kind of scary, the residency programme, how it’s come under attack. There’s a lot of discussion there.
“Our core business for residency programmes typically comes from Canada, the UK. Is that still coming? A lot of offshore banks are closing up, trying to strategise what to do. If it keeps going the way it’s going, if the OECD decides at any time to threaten us, change the policy so it works against us, how do we deal with that?
“Is The Bahamas in a position to draw the line in the sand? I don’t know. When are we going to make that decision? Can we ever do it? Are we always going to be in a position of negotiating weakness? We’re being treated as if we’re offering an investor citizenship programme.”
Still, Mr Carey and Peter Dupuch, president of Nassau-based ERA Dupuch Real Estate, told Tribune Business that projects such as Gold Wynn at Goodman’s Bay; the Palm Cay expansion; Sterling’s $250m Hurricane Hole redevelopment, and further build-outs at Albany and Baker’s Bay promised significant new inventory coming on to the market for sale.
“We’re still busy. Our sales have been up this year pretty good, and hopefully they’re up next,” Mr Dupuch told Tribune Business. “It’s just getting our name out there, and we’re constantly working to put ourselves in front of the buyers coming here.
“People are still interested. Every day we’re getting inquiries in Nassau and the Family Islands. Let’s just hope the market stays up in the US; that’s what drives our market. Barring any economic downturn in the US I do foresee 2019 to be as good as or better than 2019. We have a lot of product coming on to the market, new stuff, things that are going to do well for us.”