Residential properties are holding their value well despite the effects of the economic downturn.

That is the view of Buddy Rego, president of Rego Sotheby’s International Realty, who said the price of stand-alone homes had risen 11 percent and condominiums by 12 percent, according to data on completed sales registered so far this year.

The data, of completed transactions so far in 2010, show that the average price of a stand-alone home this year is about $1.45 million and for a condo, $935,000.

Prospects of a stronger market recovery were being weakened by months-long waits for the processing of licences required by Bermudians married to contributing non-Bermudians to permit them to buy a property, Mr Rego added.

In the commercial property market, the combination of new space coming online and the impact of the downturn is helping tenants to get a better deal.

Penny MacIntyre, Rego Sotheby’s International Realty manager, commercial sales and leasing, said she had seen some rents for top-end commercial properties fall by 25 percent from their pre-fall 2008 levels.

Mr Rego said average median prices of stand-alone homes had rebounded to 2008 levels, while condos had risen in value - a trend he described as “encouraging, to say the least”.

“The overall message is that, while the volume of business continues to decline, the values of properties that are trading are very much holding their own, they’re not slipping,” Mr Rego said.

While the number of sales was lower at the luxury end of the market, the level of interest from potential buyers was climbing, he said.

Mr Rego added that the recovery in the first-time buyers’ market was struggling to gain traction for two reasons in particular.

“Banks are now much more stringent with their lending standards,” he said. “We’re not seeing 100 percent financing any more, for example.

“Also, the first-time market continues to be hampered by the requirement for non-Bermudian spouses of Bermudians to have a licence before they buy their first home.

“The process of getting that licence is still taking between eight weeks and four months.”

Because of this delay, some Bermudians with a spouse from elsewhere had lost out on a property, he said, because the seller did not want to deal with the delay to the transaction of having to wait for the licence to be issued.

Also Bermudians were not allowed to buy a second property with their non-Bermudian spouse, a rule that was have a further dampening effect on any market recovery.

So while local real estate has traditionally been a favoured investment vehicle for Bermudians, this investment was being limited by the rules for non-Bermudian spouses.

“I understand the Government’s need to compile the registered acreage of property owned by non-Bermudians and that this process contributes to that,” Mr Rego said.

“But personally, I don’t believe that a property owned by a Bermudian and a non-Bermudian should be counted in that total.

“The non-Bermudian spouse is part of a Bermudian family and the parent of Bermudian children.”

He said he also understood the concerns over the case of divorces, with the non-Bermudian having a claim on the property, but added: “There are legal ways of dealing with those situations.”

On the commercial side, Ms MacIntyre said she’d seen service charges adjusted and more flexibility being displayed by landlords, as well as rents being substantially lower than they were before the 2008 financial crisis.

She expects to see more pressure on pricing of older spaces as space in new buildings has come online and some companies have taken advantage of lower rents to move to better premises as their leases expire.

“Most certainly, tenants are getting a better deal, “ Ms MacIntyre said.

“Landlords really have to get their pricing right. They have to do their homework.

“They’re having to decide whether they want a certain rent or whether they want to get someone in rather than having it stand vacant.

“The perception can be that when a space is vacant for a long time, that there is something wrong with it.”