By NEIL HARTNELL
Tribune Business Editor
A prominent Bahamian realtor yesterday said he is "getting bombed" by a surge in buyer interest and visits that has taken him by surprise since the borders opened.
Peter Dupuch, founder and president of ERA Dupuch Real Estate, told Tribune Business that his firm's website was "generating hundreds of leads a day" after the government relaxed restrictions on commercial flights into the country.
Disclosing that he had spent last week in Eleuthera showing "big acreage" to potential investors, he added that he had spent pre-Independence taking a different group of foreign buyers around high-end properties in Nassau and Paradise Island.
With several deals "looking like they're going to go under contract", Mr Dupuch urged the government to do everything possible "to encourage real estate sales" given that they represent one of the few potentially significant sources of foreign exchange earnings available to The Bahamas near-term while tourism tries to recover.
In particular, Mr Dupuch said the present VAT transaction tax structure creates an inflationary impact on real estate prices that eliminates the "fixer upper" market while also penalising sellers when they have to sell for less than they acquired a property for.
Still, he reported strong buyer interest in both New Providence and the major Family Island markets, with international clients also on the hunt for deals in storm-ravaged Abaco and Grand Bahama.
"We've had a lot of interest since the borders opened. It's been significant. I've just been out all day yesterday and today with foreign clients," Mr Dupuch told Tribune Business.
"We've had a number of transactions that have just come up since July 1. We don't have them under contract yet, but they look like they're going under contract. We're busy surprisingly, but I'm not complaining.
"There's a lot of pent-up demand. People have been waiting, and I think they realise this is the time to buy. My father always said that when everybody does a), you go to b). Don't go with the masses," he continued.
"I feel because it's built up, built up over the past three months that we've been locked down, I feel like we're getting bombed. Our website is generating hundreds of leads a day, mainly international but also local.
"I was in Eleuthera last week showing big acreage. People are looking in Abaco, looking in Bimini, looking in Nassau, looking in Eleuthera. Bimini has been quite popular lately, maybe because people feel they can pop over from Florida."
Mr Dupuch added that investors were also focusing on storm-ravaged Abaco to "take chances with purchasing for pennies on the dollar" in the hope that real estate prices will rise in line with the island's rebuilding.
"It's surprising to me," he revealed. "I didn't think we'd be this busy the first week that the borders are fully re-opened. It's definitely more than I expected. We're definitely getting a lot more calls and a lot more people coming to visit."
Converting this interest into actual sales will be critical for both the real estate industry and wider Bahamian economy in the short to medium-term as the country, and its major tourism source markets, continue to grapple with the fall-out from COVID-19.
Admitting that "we have a long road ahead on the economy" to restore output to pre-pandemic levels, Mr Dupuch said the Government needed to urgently explore ways to stimulate a foreign exchange source that has become even more vital in tourism's absence.
"The Government has to encourage real estate sales, and has to try somehow to encourage people to invest in property and also to refurbish property," he told Tribune Business. "The way our Stamp [VAT] structure works, it's an inflationary impact on a home.
"You buy it for $100,000, and by the time you close the cost is nearer to $120,000 with all the taxes and costs. If you want to sell it and recoup those costs, you have to put it on the market for $120,000, which is like $160,000 gross. It's inflationary, and why people don't refurbish homes.
"In the US it's big business, but paying VAT when you buy and sell it, you lose the profit from fixing the home up. That's why nobody does it. Nobody buys a fixer upper to resell because there's no profit in it," Mr Dupuch continued. "We should be opening the housing market and encouraging people to buy.
He added that persons selling property for less than the price they bought it at, meaning they will make a loss on the deal, were further penalised by having to pay the VAT transaction tax on the disposal.
"If you lose money on your property you shouldn't have to pay the tax again in my opinion," Mr Dupuch said, noting that gains on property sales in the US were captured by a capital gains tax - something that The Bahamas does not have.
Mario Carey, principal of Better Homes and Gardens Real Estate MCR Group Bahamas, told Tribune Business that his office was also "extremely busy" as a result of buyer interest following the emergence from COVID-19 lockdown.
"None of my agents are saying, boy Mario, we're really afraid, things have really slowed down," he said. "We have a diversified group of buyers. One guy was looking to rent a home for $85,000 a month at the high-end. I'm not sure how that's going to come together, but it looks like they want it to."