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Advertisers Dupuch & Turnquest & Co.
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Home ownership on the rise, with a focus on second homes
In the past The Bahamas had prohibitive policies inhibiting real estate purchases, according to George Damianos, president of Damianos Realty Co., Ltd. When the pro-investment Free National Movement government came to power, it cut red tape and facilitated real estate investment in the country, making the second home market particularly attractive.
The Local Market
With the Bahamian economy mirroring that of the United States, Alfred H. Stewart, president of British American Bank, said, “Young Bahamian couples are buying homes as fast as they can qualify. The market is very competitive with interest rates between five percent and ten percent.”
“The net result of increased tourism business and industrial jobs here in Grand Bahama is that there will be more people living on the island, with the vast majority of our land being developed for people that are working here,” said John Markoulis, president and chief executive officer of the Grand Bahama Development Co., a joint venture between the Grand Bahama Port Authority and Hutchinson Port Holdings.
Lincoln A. Ritchie, president of the Grand Bahama Chamber of Commerce and executive vice president of Innotec Ltd., concurred with Markoulis, and said that the market for executive housing is in great demand. A recent project he oversaw, “Water’s Edge,” a townhouse project catering to the professional business person, is already 98 percent full.
Demand for Second Homes Grows - The second homes market is upscale with a plethora of new options available ranging from beachfront, golf course and canal-front homes and condominiums on islands throughout The Bahamas. Once the playground for the rich and famous, The Bahamas is seeing new young professionals and Internet millionaires buying second homes.
With new developments going in many of The Bahamian Islands, commercial developments are pushing up real estate prices. In some places, homes purchased a year ago have doubled and tripled in value because of increased business coming to the islands and demand for the product.
“There is a high demand and a low supply of second homes,” said Mark Roberts, vice president for Caves Village Development in New Providence. “For example, Caves Point did extremely well; it sold out one year in advance. One purchaser bought a unit for $425,000 and sold it one year later for $800,000.”
Damianos noted that because of the diversity of The Bahamas Islands, each market is different. He noted that U.S. buyers tend to gravitate toward the family islands, focusing on yachting and leisure, whereas Canadians and Europeans who can truly benefit from The Bahamas tax-free status tend to go toward Nassau. Nassau is where the majority of people who do offshore business buy their homes. The Grand Bahama real estate market is coming along on the heels of Nassau.
The market in the Abacos and Exumas is more family oriented, said Damianos. Many people buying second homes on these islands are buying them for retirement purposes or as vacation homes. Some parts of these islands cater to the “khaki millionaires,” or a wealthy person that is more laid back with do-it-yourself attitude.
According to Peggy Thompson, proprietor of Hope Town Hideaways in Hope Town, Abaco, prices in the market there range from two million dollars for a house to $55 million for a 55- acre plot. She noted that increasingly people are buying second homes and renting them out during the off-season months that they are not using them. This has allowed more people to afford to buy homes and has made Hope Town busy year round.
“This is a very private place where famous people come to get away and no one bothers them,” she said. She divulges that the crowd attracted to Hope Town is successful, very active, self-sufficient and young at heart.
Throughout The Bahamas prices vary greatly depending on the island and the amenities desired. They can be as little as $5,000 for a plot of land to several million dollars. The average starting price for a house is at least $250,000.
Residency in The Bahamas
The Bahamian government, interested in increasing investment by private individuals developed a residency program. While investment minimums were once $250,000, the cost has been raised to $500,000 to ensure an upscale market.
Investors who invest more than $500,000 in a business or a property can apply for residency. Those individuals that buy a property to use as their permanent residence will get a homeowners card and must pay a $500 annual fee. The cost for individuals who seek permanent residency in The Bahamas but will not be living in a residence full time is $10,000 after the investment is made. Those interested in annual residency must have a lease on a house or apartment and pay a fee of $1,000 per year. The permanent residency process can take several months.
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Table of Contents The Bahamas: An established tourism and tax-free financial services center experiences a renaissance |
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The real estate market in The Bahamas is booming. The number of Bahamanian homebuyers has increased and foreign investors looking for second homes have made substantial purchases.