The non-Bermudian house market has five completed freehold contracts so far this year and there are several others at varying stages of contract.

John Sinclair of Sinclair Realty, the Bermuda Affiliate of Christie’s International Real Estate, said that after a quiet 2012: “Even by ‘pre-economic-downturn’ standards, 2013 has proved to be a healthy ‘average year’.

“The good news for Bermudians and Bermudian companies is that several of these are ‘tear-downs’ and there were will be quality residential construction projects coming on the boards.”

And prices for these properties are at record levels.

The new ultra high end price range spans from $25 million to $45 million, he said.

“Since the mid-1990s, a number of very substantial, high value estates and compounds have been and are being constructed around the Island, most of which are on spectacular waterfront sites occupied by older homes that had seen their day. These rebuilds have created a new international standard for Bermuda luxury real estate. As life and family requirements seems to change in 12- to 15-year cycles, these properties are now beginning to come on the sales market.

“But with the highest price ever paid in Bermuda so far being about $22.8 million — essentially a land-value sale with a dilapidated dwelling — so there are no ‘comps’ yet for this new inventory. Some of these are truly world-class estates that stand among the finest in the world. Chelston Estate on Grape Bay Beach in Paget, listed at US $45 million, is an example.

“The change in Bermuda Government policy, particularly the lowering of the non-Bermudian licence fee has been a motivating factor in several of the 2013 non-Bermudian sales, but so far the tangible impact has been in the ‘mid’ high-end market, from about $5 million to $15 million. But again, we’re talking about a handful of sales. There’s more policy revision work that needs to be done in order to attract the world’s wealthiest to Bermuda.

Buddy Rego, president of Rego Sotheby’s International Realty, said: “While the average prices in this ultra high-end luxury market have not risen higher, the real story is that Bermuda’s high-end real estate is undervalued when you consider buyers may now purchase these properties for less than the replacement cost of buying the land and building the house anew.

“The Island’s challenge is to better market itself internationally so that the rest of the world knows the value of our internationally available real estate. Key selling points for Bermuda are location with proximity to gateway cities, infrastructure and civilised, developed business community.”

The first house to break the $1 million dollar ticket price was ‘Atlanta-by-the-Sea’ in Tucker’s Town. That was more than 30 years ago.

Today, there’s a ‘For Sale’ sign in Tucker’s Town on the lawn of a $38 million dollar property — one of a small handful of Bermuda properties which have reached stratospheric price levels.

Described on the Knight Frank website as: “This waterfront gem in Tucker’s Town, ‘Idolwood Lagoon Estate’, is set on 4.27 acres and comprises a beautiful main house of approximately 10,350 square feet. and three separate cottages together offering an additional 4,000 square feet.

“This stunning main residence was completely rebuilt in 1997 includes five bedrooms suites, a study with half bathroom, a spacious two-storey entrance hall, grand living room, formal dining room, kitchen, family room and two-storey library.

“Adding to its desirability are four garages, gym, tennis court, an extensive orchard, nature trails with ravines, two docks and moorings.”

While ‘Idolwood Lagoon Estate’ is in a very small club that includes the former US Consul’s residence ‘Chelston’, in Paget, which is listed at $45 million, houses priced in multiple millions are not uncommon.

Knight Frank has five homes priced between $15 million and $20 million on its website, and four in the $6 to $10 million bracket.

And Rego Sotheby’s lists 15 homes at $5 million and above.

One, priced at $19.5 million, is a beach front home in Paget. Realtor Margaret Young said of the house: “‘Agapanthus’ is perfect for a larger family.

“‘Agapanthus’ is the epitome of elegance — both inside and out. Every detail of this grand estate has been carefully crafted with superior materials and workmanship, all paying homage to traditional Bermuda architecture. The main house includes four spacious bedrooms — all en suite, a vast formal living room, an informal living room/movie room with wet bar, dining room and library all with fireplaces, an office wing, a conservatory, two wine cellars, elevators and a two bedroom staff apartment.

“The grounds are beautifully manicured and feature a beach pavilion, two bedroom guest cottage, separate gym, pool, tennis court and putting green. This incredible property also enjoys a manicured trail leading to a secluded, private and peaceful beach.”

Mr Rego explained that high-end properties at $10 million and more account for 37 percent of the international market — properties with annual rental values at $177,000. He said 30 percent are located in Tucker’s Town; 10 percent in Point Shares; 30 percent in Paget, 20 percent in Warwick and 10 percent in Southampton.

“So far, within the 10 months since the change started, the new land policies for international buyers have had little effect on the sales of very high-end properties,” said Mr Rego.

“Statistics show that the number of ‘for sale’ inventory of these high-end properties ranges from 25 to 30 at any given time and the current inventory is on par with those statistics.”

Mr Sinclair said: “Even in the best economic times, Bermuda’s luxury real estate market is, and always has been, razor thin with literally only a handful of properties selling in any given year. As such, there simply is not enough volume to create meaningful ‘statistics’ and their use can be misleading.”

He referred specifically to the sale of freehold houses and estates — or ‘fee simple’ as it is known in the US — which are eligible for sale to international purchasers as well as Bermudians, due to the property having a qualifying ARV, most of which are found in Tucker’s Town, Paget, Warwick and Somerset. “The other critical point to remember is that Bermuda’s luxury real estate market is ‘artificial’ because it is totally dependent on Bermuda Government policy, which can and does change. Because of these changes, comparing year-over-year sales is like trying to compare kiwis and eggplants. The most responsible study of the market and value comes from analysis that is conducted transaction by transaction.

“The condominium market, even at its high end, is a very different animal, and it can be misleading to lump them together in a market analysis,” he said.

“If one examines the last 20 years of non-Bermudian category freehold house sales and removes those that were actually purchased by Bermudians, a startling fact remains: in most years, only four to six non-Bermudians buy a house in Bermuda. So this is a highly specialised market and, contrary to popular belief, the annual number of sales has actually held amazingly steady through all sorts of Bermuda Government policies.

“Again, taking a 20-year view, the ‘average’ sale price of a non-Bermudian estate has steadily increased throughout this period and now stands at about $8.5 million. — no big bubbles or bursts. The notable exceptions were 2009, with no new non-Bermudian house contracts, which reflected fallout from the world financial crisis; and 2012, with only one new sale, which reflected Bermuda’s economic and political vacuum in the lead-up to the December election.”

He said the time frame for the sale of one of these properties is as individual as the estates themselves, especially at the ultra high end. “Sinclair Realty’s 2006 sale of the eight-acre ‘Frick’s Point’ peninsula in Tucker’s Town, which at the ‘net’ equivalent of $22.8 million represents the highest price ever paid for Bermuda residential real estate, was never even ‘on the market’. But if forced to generalise, the Island-wide average for non-Bermudian category property sale is about 16 to 24 months and this has been true over the last 20 years.

“In other international jurisdictions, it’s certainly not unusual for properties worth $25 to $50 million to take three or four years to sell.”