The recession has put the brakes on Bermuda's real estate market this year.

Transactions are down 57 percent through the first 11 months of 2009, compared to the same period in 2008, and dollar volume fell 58 percent, according to Government-registered closings.

Rego Sotheby's International Realty has observed an unusual trend this year — that the market has been buoyed by the lower end.

The firm's president, Buddy Rego, said condo prices have held up well, but high-end homes have slipped in value and are tougher to sell.

Also, buyers are taking more time to make an offer on properties that attract their interest and rents on luxury properties have plunged by between 25 and 40 percent.

Mr. Rego also said he was concerned by Government's plans to increase land-holding charges for non-Bermudians purchasing properties — as detailed in a bill tabled in the House of Assembly on Friday — which "do not bode well" for the real estate market.

"The condo average price and median price have both increased this year," Mr. Rego said. "The average price is up 11 percent on last year and the median price is up four percent.

"I think that's down to a number of things, but mainly that there are a lot of newer units on the markets and so the product is better than ever." The Government's dropping of stamp duty for first-time buyers for properties costing up to $750,000 may also have boosted the lower end of the market, he added.

Rego Sotheby's found that the median price of a condo through the first 11 months of the year was $820,000.

Further up the price scale, pricing was not so buoyant. The median price of a residential stand-alone house held steady at $1.2 million compared to the same period last year, but the average price fell 13 percent. Turnover in this sector fell 54 percent. And the market for luxury homes (with an annual rental value of $153,000 or more) slowed dramatically. Rego has seen sales of four luxury units completed in 2009, at an average price of $4.9 million, compared to 14 units at an average of $6.5 million in 2008.

Mr. Rego has seen a change in buying habits, as uncertainty generated by the local and global economic slump, has made people think harder about major financial commitments. But the down market also presents opportunities. "There are people who are ready, willing and able to purchase, but they have been taking longer to pull the trigger," Mr. Rego said. "They are making more visits to more properties than they have done in the past before they make an offer."

He had seen uncertainty about the future from some clients, who feared for their jobs and for their level of compensation.

"However, we've not seen panic selling, nor have we seen the downward pressure on prices that they've had in the US because of mortgage foreclosures," Mr. Rego said.

On Friday, Government tabled the Bermuda Immigration and Protection (Land-Holding Charges) Regulations 2009 in the House of Assembly.

They will require non-Bermudians to pay high charges on the value of the land for properties they buy on the Island. For homes the fees will go up from 22 percent to 25 percent and for condo units, from 15 percent to 18 percent.

"That does not bode well," Mr. Rego said. "This is not an economy where one needs to be increasing the purchasing cost."

Of the four luxury homes sold this year, two have been purchased by Bermudians, while locals purchased 79 percent of the luxury condo units (with annual rental value of more than $32,400) sold.