Calm before the storm in real estate market, says broker

It’s likely the local real estate market is experiencing the “calm before the storm”, as activity remained fairly stable to the end of the year, however Eugene “Gino” Maycock, senior broker and appraiser of Colonial Realty, said he noticed a trend of force majeure impacting contracts at the start of 2021.

Maycock said while the COVID-19 pandemic did not have an immediate impact on leases and sales, he believes it will eventually and has already started in some pockets of the market.

“This is a strange phenomenon because you expect in a crisis like what we’re experiencing, you would expect this serious fallout or response to the market and what’s going on. But it’s actually held stable for the most part. Now I would say there are areas and maybe it’s just a little delay before you actual see something – like they say, the calm before the storm – in the mid-high market like Balmoral where contracts end for something they call force majeure or acts of God so to speak,” he told Guardian Business.

“So there are persons who would have had to cancel their contracts because of COVID-19 and because the companies that 

contracted them have closed their doors or reduced staff or went virtual and so now they don’t need them in the office anymore. So they say let’s cancel this, you go back home to where you came from and you can work virtually. So there’s a very small area of the lease market that had this fallout. It often has a ripple effect.”

The just released consumer price index (CPI) for the month of December showed that the category of “housing, water, electricity, gas and other fuels” was the only one that had a marked increase from 101.31 in July to 105.8 at the end of the year.

Maycock said while there hasn’t been significant change in prices just yet, he anticipates The Bahamas will soon see a change in the market.

“The housing bubble crash in the US in 2008 really didn’t reach us to the point where we felt it in the pocket for another seven years. And then it was said it would last seven years,” he said.

“There’s always a delay. For example we did have some direct affect of the pandemic, but it hit the low end housing market, like Garden Hills, Elizabeth Estates, Carmichael, Over-the-Hill. That speaks to those persons who would have experienced job losses with the closure of the hotels and so forth. But the lower and upper middle class still have their jobs and there are still a good percentage of those persons in executive positions within the hotels that still got a salary to complete contracts.”

The Bahamas Real Estate Association (BREA) earlier this year lamented that the local market was being hampered by slow mortgage approvals by commercial banks, but stated that there has been increased demand for higher end foreign residential rentals and second home purchases.

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