Foreigners attracted to Bahamian real estate
January 07, 2013
While the housing market continues to improve in much of North America, recovery is slow in parts of the Caribbean, including in the Bahamas. The Wall Street Journal reported in December that among the hardest hit are hotel-condo developments, some of which halted construction during the recession and have yet to restart. Prices dropped as much as 30 to 40 percent between 2007 and 2010, depending on the area. The result is an abundant condo inventory and prices at recession lows. The upside: Inventory is drawing interest from potential buyers around the globe, which has helped to steady prices as sales volume picks up.
According to Franon Wilson, president of the Bahamas Real Estate Association (BREA)
, the housing market is continuing to improve in the Bahamas, with 2012 witnessing the introduction of several new projects and existing projects reaching new levels. "The Albany Resort launched another phase of the exclusive development, while Bakers Bay continued to build homes and add amenities," says Wilson. "The Caribbean’s largest single phase development, Baha Mar, is still under construction. The multi-billion dollar project is 50 percent complete and is on target for completion in 2014."
Beyond the climate and scenery, buyers are attracted to the Bahamas because of its stable government and sovereign status. Most property can be purchased by foreigners as freehold. Some permits are required, depending on property use and size, but most would not typically apply to the holiday home buyer.
Of foreign buyers, as many as 80 percent are Americans who spend their winters in the Bahamas, but Europeans and Canadians are also represented, according a Sotheby’s International agent. "Those purchasing property at $500,000 or above may apply for residency status, offering a distinct tax advantage. The Bahamian zero rate income tax, capital gains tax, corporate tax and inheritance tax is luring wealthy investors looking to avoid growing tax burdens in their home countries," said Wilson.
BREA recently launched a Quarterly Real Estate Activity Report based on MLS data, providing insight into general market pricing trends and value. “In the Bahamas, it’s very difficult to get accurate numbers, and in real estate it’s even harder," says Wilson. [The report] will lead to more transparency in the marketplace, more real data so that Realtors and brokers have the ability to go out with more significant facts rather than impressions they may have.”
BREA is a member of ICREA, representing more than 600 licensed sales agents in the Bahamas.