City property sales dry up

Sales in the City of Hamilton are nearly off the chart — but not in a good way. Statistics compiled by Coldwell Banker Bermuda Reality show 2012 that was the worst in the last nine years.

Just as telling, if the last four years sales were combined, they would not even equal 2004, which was the worst of the previous five years.

Susan Thompson, agency manager for Coldwell Banker Bermuda Realty, told the Bermuda Sun said that the few new units that have come on the market recently “have taken a considerable period of time just like it has for other properties on the island.”

She said there was a huge spike in 2008 when complexes were completed at Dundonald and Park Place leading to almost $45 million in sales.

A report by the realtor said the development of Atlantis by Sir John Swan in 2004-5 “proved to be somewhat a re-awakening for our City. This resurgence of city housing was followed in relative short order by 2 additional residential developments providing modern, contemporary city living.

“The community ultimately embraced this new form of housing product with the initial demand for occupancy emanating predominantly from international business people resulting in ready made investments for Bermudian buyers.”

The report said the downward turn after 2008 can be attributed to “the significant changes in the job market with a number of exempt companies relocating to other jurisdictions, local companies downsizing, retail business closures, etc.

Mortgage defaults

“All of these factors have resulted in a drastic decrease in income for many families. The ‘knock on’ effect has been a softening of the rental market, mortgages falling into default and the necessity to cut back on one’s overall spending habits.”

Coldwell Banker said prior to the downturn in the economy many Bermudian’s bought city residential units for investment purposes.

That coupled with “more liberal lending policies provided many with the opportunity to purchase a unit and rent to executives and other international business people and returns were significant. Investment purchases have been few in the more recent period as people were nervous about their ability to secure a good tenant. Others expressed a desire to wait to see the results of the recent 2012 election.”

The realtor added that while suffering a stiff decline in sales, residential units in City of Hamilton have held their rental value “much better” than other areas of the island.

“The major issue is demand by both buyers and tenants. With the number of international business people who have left Bermuda, demand by work permit holders is significantly lower than previously seen.

“Now that we have crossed over into the New Year, we are hopeful that policies currently under review will assist the various market segments to collaborate and inject some new energy into the economy overall, providing a boost in confidence to those who are in a position to take advantage of excellent prices for city units currently on the market.

“There are approximately nine units for sale within the larger complexes with a number of other units located in smaller developments on the outskirts of the city limits.”