Bermuda Real Estate: Year in Review 2015 by Rego Sotheby’s International Realty

28 Jan 2016 - Partners’ Perspective

By: Buddy Rego (Partner) and Penny MacIntyre (Partner) - Rego Sotheby's International Realty

Confidence and value typified the market drivers for almost all sectors of the Bermuda real estate market during 2015. Doubters have re-entered the market in most cases buying primary homes and owner-occupier commercial properties. Confidence has spurred to a lesser degree some investment purchases; however, caution is still to be exercised when dependent on rental income. 

For the third consecutive year, dollar volume and transaction volume has increased. Following the 2008 world financial markets’ collapse, Bermuda’s real estate market felt the ripple the following year until bottoming out the end of 2012. Since then, we expect the real estate industry island-wide to achieve a 30% increase in dollar volume and approximately 25% increase in transaction volume once all sales are officially recorded for 2015. 

In the residential market, condominiums sold with an ARV below $32,400 continue to struggle in recovery. Those with an ARV equal to or greater than $32,400 have shown some resiliency with 84% being bought by Bermudians - up from 62% in 2014. The average price of those sold was $850,000 marking a 13% decline over 2014 sales figures. 

The number of houses sold in 2015 will remain approximately the same as 2014 with an average sold price also consistent at approximately $1.2M. 70% of all houses sold where for less than $1.5M. The luxury housing market (those with an ARV equal to or greater than $153,000) enjoyed a significant resurgence over 2014 in both total number of properties sold and the average sold price. In 2015, 12 properties have been recorded as sold -- Twice as many as sold in 2014. The luxury home average sold price rose 9% in 2015 to $6.2M versus $5.7M in 2014. Over the last 8 years, Bermudians continue to purchase approximately half of the luxury homes sold. 

What is left of undeveloped land saw mixed results with more than the 11 properties sold in 2014 with 17 properties sold in 2015. Yet lower average sold price of $340,000 in 2015 - down from $520,000 the prior year. 

The most optimistic news of 2015 comes out of the Commercial sector with the most number of properties sold in the last 8 years. Historically the Commercial market took 3 years to sell what was achieve in 2015 with 19 Commercial properties sold. Expect Commercial acquisitions of 2015 to bode well for the construction industry as nearly 100% of the Commercial properties sold required modernization. The significant drop in the average sold price from 2014’s $2.4M to $1.14M in 2015 is not a statistic that defines values and trends since a single high or low sold price in the generally low volume of Commercial sales in Bermuda will easily cause the average price to fluctuate. Rather the price per square foot (or $ PSF) is the barometer most relevant once comparing like-for-like inventory. Commercial properties in 2015 demonstrated a wide range from $60 PSF up to approximately $315 PSF. 

Ultimately for our Commercial market, the volume of unit sales is most important and the stories behind those sales. The 2015 uptick was largely spurred by owner-occupiers’ operational necessity. Sitting tenants bought into a location to continue or set-up their business while seeking to control and create statement spaces. The challenge for Sellers became putting forth sale prices that made sense for these entrepreneurs to abandon their renting habits despite competitively low rental rates. Average base rents per year varied widely depending on condition of spaces but in 2015 ranged from $40 to mid-$50s PSF for Class A spaces and Class B from $25 to $36 PSF with more than half the market seeking 2,000 up to 4,500 SF of office space. 

Overall commercial inventory in the central business district of Hamilton has reduced with more start-up businesses from law firms both locally and internationally establishing presence in Bermuda to retailers seeking to capitalize on consumer confidence with America’s Cup 2017 drawing more first-time visitors. 

As well recovery in Bermuda’s hotel tourism market is evident practically monthly with news of progress with various hotel properties either about to go under contract or expected to break ground. We continue to garner development / redevelopment interests from local and international prospective developers and hotelier operators. 2016 will have added moment as we prepare to launch Bermuda’s newest condominium-hotel and villa residences at the former Pink Beach Club property. 

For Further Information Contact: 292-3921 or by e-mail:




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