Realtor: ‘Tides appear to be turning’ for property market
Coldwell Banker Bermuda Realty is reporting sales are up 33 percent, year over year; however, property prices have remained stagnant.
The increase is in the number of properties sold, according to the real estate company.
Brian Madeiros, Coldwell Banker’s president and chief executive officer, said that while the data has not been substantiated through registration of all property sales transactions with the Government’s Registrar General: “ ... we are confident enough to state that the number of property transactions completed in our residential real estate market is trending upward”.
He said: “Economists will tell you that a decline in real estate sales, followed by a decline in prices will ultimately impact consumer spending.
“As home equity erodes, so too does consumer confidence and spending, resulting in a downward spiralling of the overall economy. These economic principals apply to our island home as directly as they do in other jurisdictions around the world.”
He said: “We have all witnessed or experienced first-hand the financial and emotional pain associated with this unprecedented economic shift in Bermuda.
“Fortunately, the tides appear to be turning and the increase in transactional sales volume which was first identified and reported in May 2014 by Coldwell Banker Bermuda Realty has developed into a definable market trend, indicating improvement in the residential real estate market during the first half of 2014.”
The realtor added that so far in 2014, research indicates that 20 percent of the company’s closed transactions have been ‘fixer-uppers’ while 30 percent have been condominium sales, including residential apartments in the City of Hamilton, and 50 percent of the current pending sales with Coldwell Banker Bermuda Realty are condominium units that range in price from $350,000 to $770,000. “They are either newer build within the last ten years, or newly renovated,” said Mr Madeiros.
“Buyers are seeing opportunities from both an inventory and pricing perspective.”
If Bermuda continues to follow global norms, he said it would be “reasonable to expect” that the economic trickle down as a result of these transactions will start to have a positive impact on our retail industry in the latter part of 2014. “We continue to see demand for certain market segments and price points and are looking to secure new listings to satisfy this demand,” said Mr Madeiros.
“Marketing strategy around exposure and pricing is absolutely imperative in today’s market and our agents are available for consultation if people are considering selling their property”.
There is still 600,000 square feet of vacant office space looking for tenants in Bermuda, according to Brian Madeiros, president and chief executive officer of Coldwell Banker Bermuda Realty.
“Our commercial rental market is traditionally one of our leading economic indicators,” he said, “ ... and the current office vacancy rate of over 600,000 square feet is still a concern as it relates to sustainable economic recovery.”
The amount of office space available for rent has remained steady for some time, according to Coldwell Banker.
He described it as “a solid note of caution, particularly with regards to population growth and the ability of our local economy to sustain long term growth over time”, adding a gradual reduction in the current office vacancy rate would indicate potential business expansion and an increase in our overall population.
Mr Madeiros said this may only be possible through further incentives to encourage existing businesses to expand, along with creative or perhaps unconventional methods of attracting new business to our shores. “Without more people in Bermuda, it is questionable whether the improvement we have recently seen in the local sector of our real estate market and the potential ripple effect for other local businesses will be sustainable in the longer term.”
