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Crime fears collapse $18m PI home sale

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GEORGE DAMIANOS

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RYAN KNOWLES

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MARIO CAREY

• Realtor warns Bahamas ‘going to pay’ for unsafe perception

• February vacation rental bookings said to have fallen 5-10%

• Bahamas ‘approaching fine line’ although remains ‘safe spot’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An $18m home sale in Paradise Island’s Ocean Club Estates collapsed yesterday after the buyer was spooked by The Bahamas’ crime woes, with a realtor warning: “We’re going to pay for that.”

George Damianos, Damianos Sotheby’s International Realty’s president, told Tribune Business he received an early morning e-mail from the client revealing they are now “not pursuing any real estate deals” in The Bahamas due to perceptions this nation is unsafe following recent US and international media reporting the early 2024 murder spike.

Providing tangible evidence that TV and newspaper coverage, which the Government and private sector say has “misinterpreted” an unchanged ‘Level Two’ US travel advisory on The Bahamas, is negatively impacting commerce and the wider economy, he added that the loss of such a potential transaction is “significant”.

“To be honest with you, I got an e-mail this morning,” Mr Damianos disclosed to this newspaper. “This customer and I were in contact, and they were going to come and view a home we had listed in Ocean Club Estates at $18m.”

The e-mail stated: “The US State Department has issued a travel ban on coming to Nassau and, with 18 murders that have happened since the beginning of the year, we are not pursuing any real estate deals on the island. Be safe.”

Neither the US State Department nor any other federal government agency has banned US citizen from coming to Nassau due to crime concerns. However, Mr Damianos added of the e-mail: “I met that this morning. That came in at 9.54am. They had been in discussions with me. My last communication with them was on January 29 regarding our $18m listing on Paradise Island.

The economic benefits from a residential sale of that value can be significant. Besides the $1.8m in VAT earned by the Government on the purchase price, plus future real property tax payments, realtors and attorneys will also earn fees (up to 6 percent and 2.5 percent, respectively) on the transaction value.

There are also spin-off and employment opportunities created in industries such as construction, landscaping, maintenance, housekeeping/maids, with the impact also felt by the likes of local car dealerships, furniture stores and other businesses from the presence of new high net worth owners. The effects of their spending trickle through the economy due to the rapid circulation of these funds through different hands.

“It’s disappointing. I think it’s significant,” Mr Damianos said of losing a high net worth client to crime fears. “I think the whole situation and, of course, today’s news with the two ladies in Grand Bahama. It’s difficult to get to the bottom of that situation but, whatever it is, it’s all negative for The Bahamas and compounding the murders and what’s going on.

“It’s not happening on Paradise Island, or at Cable Beach, Lyford Cay, Albany or Old Fort Bay, but the perception of it being unsafe, we’re going to pay for that. I don’t know if any other realtor has received an e-mail like that, but that’s not hearsay. That’s not made up. That’s a fact.”

Other realtors spoken to by Tribune Business yesterday did not report receiving any e-mails similar to the one sent to Mr Damianos, although some confirmed they have fielded inquiries from potential buyers having “second thoughts” about purchasing in The Bahamas and asking questions on the crime situation due to saturation media coverage in the US and elsewhere.

Ryan Knowles, founder and chief executive of Maison Bahamas Real Estate, said there had been “some marginal impact” on short-term Airbnb-style vacation rentals with February bookings down by between 5 percent to 10 percent. He added, though, that the reasons for this are unknown and cannot be blamed solely on the US and Canadian crime alert fall-out.

“There’s been some marginal impact, more so with rentals and specifically short-term rentals,” Mr Knowles said. “We’ve seen a slight decrease in bookings for February. It was not much. We’re talking maybe 5-10 percent.

“It kind of fluctuates anyway, and we had a very strong January. There could be any number of reasons. That’s vacation rentals. We’re talking rental stays anywhere from three days to seven days. We’ve seen a slight decrease. A lot of inquiries but fewer people booking. We’re unaware of what’s causing that.”

As for sales activity, Mr Knowles added: “I’ve not had any clients say directly to me that they’re not coming because of what’s happening. I’ve had a few owners, with properties on the market, ask what’s going on on the ground. Our day-to-day has not really stopped. Nothing has changed.

“It’s more the publicity thing for The Bahamas. It doesn’t look good. It’s more the perception than anything else, but the reality on the ground is that we’ve never been busier. There’s an increased level of interest in Windsor Lakes and other developments we are involved with. There’s not been any slowdown of interest in buying.

Tourism executives and government officials have been at pains to point out that The Bahamas’ has not been downgraded by the US as the latter’s travel advisory has remained at ‘level two’ since 2022. Instead, the US merely urged its citizens to take care - and be aware of - the recent spike in murders in New Providence with the 25th and latest killing taking place yesterday.

However, this has received extensive media coverage in New York and the north-east, which is the primary tourist source market for this nation, as well as across the US with much of the reporting giving the impression - described by Mr Sands as a “misinterpretation” - that the travel advisory has been elevated.

It has featured on major TV networks, such as NBC, ABC and CNN, as well as in newspapers including the New York Times, Washington Post and USA Today. The New York Post told Americans to “think twice about a tropical getaway to the Caribbean this winter”, adding: “Safety concerns have reached a point of severity where US officials say people shouldn’t even try to ‘physically resist’ being robbed.”

“I understand the Ministry of Tourism is really heavily involved now to figure out what can be done” to counter the negative impressions of The Bahamas that is being created, Mr Knowles said. “There’s a level of seriousness that our leaders seem to be paying attention to this issue; a level which maybe did not exist before.

“I’m sure they’ll be able to get a handle on it. From our perspective, the fewer incidents that happen, the better, but our clients are international and understand it happens in cities around the world. It [the crime situation] is a concern but I wouldn’t call it a deterrent just now.

“Our day-to-day hasn’t changed much. There are some inquires as to what’s happening on the ground. We’ve told them it remains normal for the most part. We’re keeping a close eye on it, but continue to do sales. I did a big sale in Windsor Lakes today [yesterday] to a local person,” Mr Knowles added.

“The fact people are buying and committing large sums of money to real estate probably tells you this situation is going to blow over. We cannot afford for anything else to happen. We have no choice at this point.”

Mario Carey, founder of Better Homes & Gardens Real Estate MCR Group, told Tribune Business that while The Bahamas remains “a safe spot” for real estate and other investors, plus tourists, it now appeared to be “approaching a fine line” where the economy will receive a hit.

He added that hotels and vacation rental owners had reported to him a 30 percent fall-off in business as soon as international media coverage ratcheted up towards end-January, while also personally receiving inquires from cruise passengers asking if it was safe to exit the ship once docked in The Bahamas.

“I think we’re still in a safe spot, but I think it can escalate easily as the US media makes it a priority,” Mr Carey said. “CBS is down here now with a news crew. It’s catching people’s attention. The Bahamas has always been a paradise, and people probably have this vision. I think we’re approaching a fine line before it gets really impactful. I think at the moment we’re OK.”

Noting that what The Bahamas is experiencing is little different from what occurs in many US inner cities and countries throughout the Western Hemisphere, Mr Carey said that compared to many other nations this country is “still safe” with international buyers typically purchasing in high-end, gated communities that are insulated from the crime crisis.

“What I do notice, in doing appraisals and speaking to people in the hotel business and vacation rentals, they noticed in the month of January that once this thing came out their business dropped by 30 percent almost immediately,” he told this newspaper. “Airbnbs and hotels saw cancellations right away.

“Me personally, I started getting questions from people coming in on cruise ships: ‘Is it safe?’ Of course it’s safe. People only see what the news says. They don’t know what’s going on here. People are still living their lives. It’s not like we are all driving on the island in fear. We have more than one island. All the murders are happening on New Providence. We have 699 other islands.

“People are not getting the real story. It’s sad that it’s going on.... Real estate sales wise, no, we haven’t seen it, but I know hotels and vacation rentals have seen it, and maybe the cruise ships. We’re delicate, but living in a gated community gives some of the real estate market a level of comfort.”

Vacation rentals are more vulnerable to travel alerts and crime advisories because they are often located outside traditional tourist and hotel zones, and therefore have less security and persons around, while also being based in or near areas suffering criminal activity. However, no tourists have been involved in or impacted by the recent murder spike, with all killings occurring away from the hotel areas.

Comments

bahamianson 5 months, 2 weeks ago

What percentage does a realtor get from selling an 18 million dollar house? He shows the house and wines and dines the client and makes between 6-10% commission. Dang. 10 % is 1.8 million. Man, Listen, I could retire of one sale. Is the realtor saying that the Bahamas will pay for that because he lost almost 1 million dollars in commission? Lol.

realitycheck242 5 months, 2 weeks ago

And the Attorneys fees will be 2% or $450,000 , i could retire on the attorney fees.

DEDDIE 5 months, 2 weeks ago

Commission and fees at that level are negotiated. It is significantly less than the 10%.

TalRussell 5 months, 2 weeks ago

Some may read this as as notin' more than the two hogging for maintaining bigger real estate commissions sons of "Nick" and "DougE'"  ---  Highly successful George and Mario, --- Gotten their knickers in a "Hog Island" twist --- After getting annoyed over the  collapsed $18 millions ``Hog Island" home sale. --- Lost commissions operated under brokers' fees --- Still calculated under the old [1922] Harold G Christie created Broker Agents Commission system. --- Yes?

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