Coldwell Banker Bermuda Realty release Bermuda Real Estate Report
Report By Coldwell Banker Bermuda Realty
Bermuda housing statistics often offer a glimpse into the health of the Islands economy and the activities of businesses and residents. Coldwell Banker Bermuda Realty has some new data that shows the real estate market is starting to mimic the summer weather conditions.... Hot! It is exciting to see the renewed interest and confidence in real estate with a cautious return to stable prices; multiple offers; and in some cases buyers looking to purchase for investment.
In this resurging market, a little bit of everything is selling...single family homes, duplexes, multiple family dwellings, land, commercial property and condos. It might come as a surprise to many that condos are outselling all other categories of real estate, but at over 1/3 of available inventory condos offer some great options for many segments of the market! Condos sold recently include units ranging from a $199,000 Harbour View Village unit to The Wharf at $1,200,000. Analysis shows that the average price of a condo based on sold properties registered in Government records for 2015 is around $590,000.
Single family homes are always in demand with the central parishes commanding higher prices. Currently, this segment of the market represents 28% of sales year to date with the average price of approximately $1,230,000.
While previously reported that land sales were lagging, we have seen some movement in this segment of the market. In 2012 & 2013 approximately 20 undeveloped lots sold each year; however in 2014 this dropped to 8. Our market intelligence indicates that approximately half a dozen residential lots have sold thus far in 2015, but it is interesting to note that there are currently 10x that number of undeveloped residential lots on the market. This indicates an excess supply of available inventory making it a great time to be looking for lots if you are preapproved and looking to build your dream home. A reminder to those looking to purchase land, the lending requirements are different for land than for residential housing. Typically, a 20 – 25% down payment is required for a house or condo versus a 50% down payment required for land.
Much to the delight of buyers looking for a deal in the market, we have seen more “fixer uppers” come onto the market in recent months. While it is always key to obtain pre-approvals in advance, if you are purchasing a property that requires major renovations or completion to occupancy, you will need to qualify for the additional funds to complete. So, to avoid disappointment, make sure your lender knows what you wish to purchase in advance if making an offer on property in un-livable condition.
In general, lending institutions are offering more flexibility with their lending practices and look at all applications on an individual basis. Based on an individual’s ability to service a mortgage your lender may look favorably on a smaller down payment or better terms, but it is important to discuss your finances and your real estate needs/desires in detail with your mortgage officer.
As the real estate market begins to show signs of improvement, prudent buyers and sellers will look for opportunities in the market. Making “low ball” offers (substantially below the asking price) either on rentals or sales can, however, be offensive to vendors and may not be a good idea as demand increases. Our market has changed; landlords and vendors working with well-educated real estate agents know the market and price their property accordingly. At Coldwell Banker Bermuda Realty our listing price to selling/rent price ratio on average is 95%. Residential rentals appear to be following the same trend as the sales market although available data is not as robust. Our rental agents report that rental demand for standalone cottages and houses in central parishes is outstripping supply and they are looking for new inventory. Prices have stabilized, when looking at rentals on average you can expect to pay: 1 bedroom $2,000; 2 bedroom $3,100 and 3 bedroom $4,550+ depending on location and condition of the property.
In conclusion, it is fair to say that the tides are shifting with regards to real estate in Bermuda. Evidence shows that in the first half of 2015 compared to the same period for 2014 Coldwell Banker Bermuda Realty experienced a 44% increase in the number of transactional sales units they were involved in and a 17% increase in the number of properties the Company rented. This translates to a busier, more active market even though the dollar volume of sales Island wide has not shifted significantly. These are encouraging signs that the real estate market in Bermuda is showing positive signs of recovery.
As we look at the commercial market, thus far in 2015 we have seen 4 closed commercial sales with 5 additional transactions in the works. If we compare this with recent years, 2012 - 6; 2013 - 8 and 2014 - 9, it looks promising that the commercial market will outperform the last four years. Scott Powell, Commercial Representative for Coldwell Banker Bermuda Realty states, “There has also been limited owner-occupier motivated interest in commercial properties for sale. Unless fully or mostly let; potential owners are hesitant to purchase solely for investment purposes, therefore this trend presents an alternative investment opportunity.”
To keep abreast of the commercial market, log in to our recently upgraded website at www.bermudacommercial.com. The only commercial real estate website in Bermuda where you can search for rental or sales by price, type of property, square footage or name of property.
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