Archives for category: Real Estate, Buyers

This is my first post for 2017.  I was terrible at writing in 2016, I was just too busy to keep up with it.  It was great to have so much real estate activity I couldn’t find time to write a post.

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One of the most interesting things I noticed when compiling the data for this blog post was how many properties take a really long time to close.  For instance, as of the date of writing this, there are 13 properties still in pending status on the Bahamas MLS from 2013.  3 years have passed and the property is still not a completed sale.  I am sure several of these are just agent error in not updating their listing status, but I bet several of the properties are still in limbo waiting some legal document or other challenge to be overcome.  The take away here is make sure you hire a good attorney who can get the job done in a timely fashion.

What’s New in Bahamas Real Estate?

The government of the Bahamas recently announced plans to raise the investment threshold for residency application from US$500,000 to US$1,000,000.  This will obviously affect many potential investors in this country who would like to take up Permanent Residence here.  I believe that the investor mindset changed somewhat after the Great Recession, leading to more risk adverse thinking.  And investing a large sum of money off shore in another country is definitely a risk.  I would counter this argument to say that the Bahamas, while not insulated from the recession, is historically a stable jurisdiction.  While some people got hit pretty hard if they bought at the high and had to sell during the low, those others who made savvy choices and invested in active markets still made out relatively well.  Take away here is stay close to active busy markets, with good amenity levels and strong service sectors.  For example, Hope Town is a very safe bet while Rum Cay or Acklins is not necessarily.  It is possible to see the vast differences in values on the Island of Abaco, where central Marsh Harbour maintains strong growth and values, while the southern part of the island has seen little to no growth or improvement (save Schooner Bay, but that is an entirely different topic).

Going back to the new investment threshold, the legislation has not taken effect as yet, and there has been some push back from the real estate sector.  With a reconsideration or concession being considered.  You can read more on the Tribune website here:

http://www.tribune242.com/news/2017/jan/20/govt-reconsiders-1m-residency-bar-following-push-b/

and here:

http://www.tribune242.com/news/2017/jan/23/bahamas-warned-real-estate-market-not-wrapped/?news

Bahamas Real Estate Market Update

I have prepared some research in the real estate market using data from the Bahamas MLS over the past 8 years.  You will see in the table below results.  The most important parameter to consider in my opinion is the orange line which shows the total number of real estate transactions recorded.  This line has a strong trend of growth for the sector.  2016 saw a total of 500 transactions recorded on the MLS, extrapolating the growth rate out, roughly an extra 50 sales a year, by 2020 we should see 700 transactions or 10% growth per year.

As the sales volume increases we can expect to see the market shift in favour of sellers and corresponding shift away from the strong “buyer’s market” which has existed for the past 10 year period since 2008.

On the chart are average and median sales price.  The MLS now has enough data to pull a meaningful median out.  The 2016 Median was $225,000, the 2016 gross average was $451,702.  You will note the sharp drop in 2014 in the average and median, this was due to the commercial banks beginning to dump distressed properties into the market through the use of licensed brokers.  The low value, high volume significantly skewed the market figures.  The positive side is that the distressed property inventory is now almost normalized and the negative pull on the market averages will soon end.

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I have added my estimates for future years, using the trend lines and my background knowledge of the market to suggest that the coming years of 2017, 2018 and 2019 will very good for the real estate sector.  However I believe the change in investor value threshold will have a significant effect.  It will mean that the local Bahamian market remain unchanged with Bahamian residents trading in the $200,000 to $300,000 range.  The higher range between $500,000 and $1,000,000, which is historically strong with our foreign investor market, is expected to dry up almost completely.  I expect do expect a bump in the market over the $1M mark as a result of the change in legislation, however I do not see the increase to be sufficient to balance the fallout in the lower segment which is effectively being eliminated.

Last years “Brexit” together with the change to Britain’s non-domicile rules has lead to a nice boost to ultra luxury home sales.  Reports are that the luxury communities of Ocean Club, Lyford Cay and Old Fort Bay have seen the strongest sales activity in years as a result of this change in Britain.  The lower end of the foreign investor market from the UK has correspondingly seemed to have seen a heavy fallout with less serious buyers for this segment.

Now, Trump is the new POTUS – What does this mean for Bahamas real estate?  It is still early days, too early to tell, but it would appear that there has been a significant increase in serious buyers from the US.  The new trend appears to have begun just before the US elections and looks like it is continuing.  I suspect it will continue through this year.  The reasons for this are not really known yet.  It could be the confidence the new president is inspiring in High Net Worths, or Ultra High Net worth investors.  It could be that the markets all over the world are doing very well, which means cash is available to invest.  It could be that the policies of the last president are starting to reap benefits?  Whatever the case may be, the indicators are good that 2017 may be a banner year.  There are certainly many changes happening in the world’s economies which so far are benefitting Bahamas real estate.

Value Added Tax was implemented 2 years ago.  It looks like it is here to stay and the economy of the Bahamas has mostly accommodated to it.  It is definitely lowering the purchasing power of the average resident, and definitely increasing revenues for the government.  Whether this is beneficial for the whole Bahamas in the long run, we shall see.

In other interesting news, the WEB.com golf tour has just completed at the Abaco Club on Winding Bay.  Early reports is that it was a great success and everyone is looking forward to next years event.  Similarly, there was another WEB.com tournament at Emerald Bay in Exuma.  It was wonderful to see these 2 spectacular courses in the Bahamas highlighted in the Golf Channel.  The Pure Silk LPGA tournament starts on Saturday at the Ocean Club, Paradise Island.  The Silk tournament on PI has been growing and gaining prestige over the past years.

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Upcoming events in Abaco:

Abaco has many other events coming up, late winter and early spring are a wonderful time on the island with all sorts of things happening.  – the BNT Art for the Parks is Saturday 28th Jan,  Friends of the Environment’s Reef Balls are in February, one in Hope Town, one in Marsh Harbour.  Mangoes Restaurant is set to re-open with wonderful new management, I am hoping it may live up its history when Bo Albury ran it and it was the best place in Abaco.  The fishing tournaments will start up again in about a month.  The Royal Marsh Harbour Yacht Club flotilla is back in town.  Junior Junkanoo is February 24th/25th, always a fun night.  MOW Fea Market, always a fun day trip on February 18th.

So, lets bring on 2017 and see where this year takes us.  Looks like it will be a good one so far.

“Top Real Estate Trends Impacting You & Your Business”

My name is Dwayne Wallas, 12 years working in the real estate business with HG Christie Real Estate.  I moved to Abaco in 2007.

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I’ve been asked to come here today and present some insight in the real estate market in Abaco.  As you all know Abaco is a unique part of the Bahamas and a unique part of the world.  In my view it is the people that make it unique.

But also and perhaps more importantly it is the geography – it is the only island in the Bahamas which has a relatively large land mass of 650 square miles similar to Grand Bahama or Andros while also having the 120 mile long chain of barrier cays.

This combination is not found anywhere else in the Bahamas or the Caribbean for the most part.  The ‘mainland’ of Abaco offers the ability for farming, logging, and more light industry or the option to have an estate or many acres with waterfront.  The tourism potential of Great Abaco Island is also very much untapped.

The barrier cays offer unique boating experiences together with wonderful communities.  Put the two together and the potential is tremendous.

I believe Elbow Cay is a perfect example of a thriving development model for the Bahamas.  It offers several small scale hotels together with restaurants and most importantly ATMOSPHERE.

The data I will be showing is derived from the Bahamas MLS.  Therefore it only takes into account sales transactions that have had a broker involved.

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What is selling in Abaco?

Hope Town is booming.  The rest of the Abacos have had a banner year but it all trails way behind Hope Town.  The community has managed to strike a balance between authenticity and capacity.  This year you could not rent a golf cart on the cay unless you booked it well in advance.  The real estate market on the cay is similarly very strong.

Treasure Cay is the close second for driving the economy of the Abacos.  The area sees a strong tourism market as well as posting a strong year for the real estate market.  The condominium market in Treasure Cay was in terrible shape, but the past 2 years have finally seen the inventory reduced and the market is beginning to normalize.

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The Marsh Harbour market is a tough nut to crack.  The market for Bahamians is starting to normalize as the banks are starting to ease lending requirements, but the property values are still depressed.  On the other hand the luxury or foreign investor market in Marsh Harbour (MH) is still very much stagnant.  I see lots of growth potential for the centre of Abaco, but it is suffering as a tourism destination.

Marsh Harbour is generally just a transit point and a shipping/business centre.  There is an opportunity to grow the tourism market here and by extension improve the foreign second home owner market.  From what I see MH seems to lack the charm and “islandy feel” visitors expect when they arrive at the airport.

Baker’s Bay is in full steam construction mode and providing tons of employment but not affecting the real estate market of Abaco at all.  It is its own microcosm and has little direct effect on the Abaco economy apart from the jobs.

Similarly the Abaco Club at Winding Bay is in slow growth mode and provides good employment but has little to no effect on the real estate market anywhere else in the Abacos.  The new developer, Southworth, is slowly rebuilding the prestige and demand.

My last point on this topic, as you can see from the chart, the strongest areas of Abaco are Elbow Cay and Treasure Cay.  The remote parts of Abaco have limited demand.

There are some good opportunities in the remote areas, but be aware that you will be in for a long haul.

Similarly the vacation rental market is only really functioning in Treasure Cay or Hope Town.

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So What about Abaco Compared to the Rest of The Bahamas?  

It is often said that Abaco is a more vibrant economy than Grand Bahama and this chart certainly shows that, although it is given that Grand Bahama is more than just real estate sales.  There is industry in Freeport which we lack here in Abaco.  Maybe for the better, maybe not?

Point is, Abaco is a strong real estate investment market, high sales volume and a high average price point.  Prices in Abaco are not too far off Nassau and second in the country.

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It is, I believe, an economic model to be learned from and encouraged to blossom.  The current test case of locally operated property tax collection on Elbow Cay is interesting and I’m keen to see how it works out.

Chart of Sales Growth Abaco

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Over the past 7 years the data shows growth of sales volume of 18% per year.  Despite the growth in the market and strong activity levels, I’m seeing property values are still dropping somewhere around 5% per year.

I anticipate this trend to turn around in the next 12 months.  As inventory is absorbed, we should see prices start to stabilize and begin to push up a little.

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Government Stimulus to Real Estate

Current incentives of 1st time buyers and Family Island Encouragement Act are having positive impacts.  I believe they should continue.

I believe the taxes on the purchase and sale of real estate is too high.

Stimulating the real estate market and providing incentives to buy here will further stimulate the wider economy.  It is said that a new home owner will further spend an additional 10-20% of the purchase price on furniture or remodeling etc.  That adds up to a significant amount of money being circulated around the economy.

I would urge the government of the Bahamas to further incentivize the real estate market and encourage home buyers, both local and foreign.

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The Acreage and Development Market is completely dead…

There has not been a single transaction of a tract of acreage in Abaco in 10 years.  There are many factors at play but the 2 key reasons I believe to be

  1. Restrictions on foreigners purchasing tracts of land via Foreign Investment Board
    • I believe this market should be liberalized.
    • Keeping it restricted does not benefit the Bahamas.
    • The tax revenue on the sale of large tracts of land is a good reason to encourage the market not restrict it.
    • The vast tracts of raw land are not benefiting anyone by sitting dormant.
    • It is all too common to have a large tract of land owned by 10 or 20 people who inherited it and they will never reach a decision on what to do with it.
  1. The cost of developing land in the Bahamas for sales of lots has risen beyond the ability to realize a profit. The cost of utilities, road paving and legal expenses, plus marketing costs are significantly higher than the price one could sell a residential building lot for right now.
    • A Non-waterfront residential lot on the main island of Abaco sells for an average of $30,000
    • Cost to develop a subdivision of lots for sale in Abaco is around $30,000
    • Therefore No incentive to develop.

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The Tribune has recently published 2 articles on land registration reform, one from the president of the Bahamas Bar Assocation, the other form the president of the Bahamas Real Estate Association.  To quote Mr. Elsworth Johnson

“A registered land system would divulge the number of frauds that cause people to be dispossessed of their land. It would also reduce the amount attorneys are able to charge [for real estate transactions]”

Thank you all very much for the opportunity to share some of my thoughts today.

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Have a wonderful day.

Check out my latest listing, its luxury, its future investment, its the most prestigious estate on the market in the Beautiful Abacos.

 

I must apologize to my readers, I have been too busy over the past 6 months to sit down and write as often as I should.  Since January, I have only had time to write once.  I shouldn’t really be taking the time now to write this but I have put it off for too long.  There have been some significant changes in the real estate market in the Bahamas lately.

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The Iconic Abaco Estate, Man O War Cay.

If you talk to seasoned real estate brokers in the Bahamas how have been in the profession for 20 years or more, they will tell you that historically in the US election year the market in the Bahamas dips.  Suggested reasons include pre-occupation of the US buyers, or uncertainty for the US economy based upon who wins the presidency, or simply that would be buyers are putting money into the campaigns of their chosen candidate.  Who knows the real reason – there is only opinion and anecdotal evidence.  And until 2008 there really was little empirical evidence to prove that the market was up or down.  As I’ve written in this blog before, the presence of our Bahamas MLS is a great improvement and tool for the real estate business in the Bahamas.  We now have 8 years of good data with the possibility to tease out some real trends based upon real numbers.  It’s night and day compared to the end of the 20th century when the internet was still unfolding.

We still have little real access to data from the Government.  But perhaps in the future that will change.  There is a silver lining to the implementation of VAT – a brand new division of government was established to collect and keep track of Value Added Tax.  It is called the Department of Inland Revenue (i know, very original right?)  This division is staffed in large part by trained accountants, who will hopefully keep good records.  Through the collection of VAT, there may be a beneficial result in the provision of detailed accurate data on the performance of the economy and perhaps even real estate.

The Bahamas still needs to clean up its act in terms of the ease of doing business in real estate transactions.  Ask any real estate professional and they will tell you the current system is not sustainable.  Excessive costs, taxes, inadequate recording, and insufficient tenure of title are a few of the downfalls in the business.  Add to it he need to provide an appraisal for every real estate transaction and the speed with which a sale can occur gets slower and slower every year.  It is still possible to close a sale in 2 months, but it is the exception.

Now for some hard numbers:  Last year January –June 2015 saw 248 real estate transaction recorded on the Bahamas MLS, the same period this year is posting 291 sales.  A 17% increase in sales activity is stellar.  Equally positive is the increase from 209 transaction during the 6 month period of 2014, showing a year over year increase of 19%.  (Side note:  There are 25 properties still pending from 2013 on the MLS)

2016 1st half sales volume

The table shows a strong growth in sales volume in the Bahamas.  I expect this trend to continue steadily.  Given this is a US election year which is supposed to be a slow period for sales in the Bahamas and given the data shows a strong market leading into this election, it is reasonable to assume that the real estate market in the Bahamas will see a bumper year. Dare I say bubble?  Or is that too early?

If the 17% growth continues, we can expect to see 340 transactions in the first half of 2017.

One interesting  point for sellers to note, is that over the past 4 years, there has been a steady 3000 listings on the Bahamas MLS.  (this year is 3,010, last year was 3,008).  This would tend to support the idea that there are a large number of sellers around the Bahamas who are fishing with prices which are unrealistic.  And these sellers continue year in and year out just hoping the movie star or lottery winner comes along to buy their home because it is so much better than the neighbors.   While at the same time there is a large segment of the market who are likely listening to their Realtor or broker and being serious about getting their home or land sold.  Point is, listen to the real estate professionals, and get second and third opinions on pricing and values.  Don’t list with a company or agent just because they say they can sell it for the highest price.  Work with the realtor who is giving you the real picture.

There are a few really good opportunities around to take advantage of this growth in the Real Estate Market.  One of them is a package of 16 beachfront condominiums in Marsh Harbour.  The possible returns could be substantial with the right person at the wheel.  Take a look at the details here:

http://www.hgchristie.com/eng/sales/detail/529-l-82276-f1603081131700243/abaco-towns-by-the-sea-16-condo-package-chance-investment-mls21404-marsh-harbour-ab

Aerial Photo ABTBS for web

PS: the construction incentive, called the Out Island Encouragement Act, was extended for another year so building materials are still import duty free until June 2017.  VAT is still payable though.  This is a good reason to start building that dream home now.  Call or email if you have any questions about this.

Many times I am asked how the process of buying real estate in the Bahamas works.  Often our foreign home buyers (who love the idea of having a tropical home in the islands) are concerned about the process and the security of the investment.  I will discuss the Bahamas Investment Safety and Security at another time.  Below I have outlined the rough steps and a very rough estimate of the time it takes for each one.  I have to qualify all of this by saying the estimates of the length of time it takes vary widely.  How quickly a sale will close in the Bahamas is dependent on many many factors, some of which are beyond the parties control.  For instance I have seen a financing application take 6 months for approval.  I have seen title and requisition process take as long at 6 months due to continuing questions arising from the history of the chain of title.

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Above: Palm Ridge at Bookies Bay, The Most Charming Cottage In The Most Beautiful Place on Earth, currently priced at $750,000.

On the other hand, I have seen instances where the whole process moved like clockwork and the new homeowner had the keys and were enjoying a cocktail on the back porch in less than 7 weeks from the time of first offer.  For things to move this quickly under the bright Bahama sun (which seems to slow everyone and everything down to the speed of warm molasses) is not a common occurrence and it is imperative to have patience when dealing with a real estate transaction in the Bahamas.

There is a major factor which can influence the speed of a real estate transaction here, and that is whether a bank is involved providing financing for the purchase and/or if a bank is releasing and existing mortgage on the property being sold.  This is partly a result of the Bahamas banking environment being dominated by 3 major Canadian institutions.  The final approvals of any major decisions the lending institution has to make is not made here in the Bahamas, it is made offshore somewhere.

That said, the lender won’t commit to financing a purchase until they have a copy of a formal purchase agreement in hand.  We commonly insert a 21 day financing clause in purchase agreements which allows the buyer 3 weeks to formalize their loan and get a commitment letter.  3 weeks may seem like a good length of time, but I would suggest working on getting as much of the paperwork as possible into the loan rep, before making an offer.  They will take 2-3 weeks just make a decision, so if they are waiting on something from you like a reference or utility bill that will hold the hole process up.  I would ask 3 times for the complete list of all the documents they will need from you just to be sure that all the bases are covered.  In my experience they always come back a week later and say they need one more thing, and often that happens more than once.

With the 21 day financing clause inserted into a formal “purchase and sales agreement”, if you don’t get the loan secured you can get your deposit back and everyone can walk their separate ways.  The vendor is often weary of entering into an agreement which is dependent on a bank partly due to the time off the market with no guarantee of a sale and partly due to a bit of expense in hiring a lawyer to prepare a purchase agreement and work with the purchaser’s attorney on the deposit etc.  Title investigations typically don’t start until after the financing commitment letter is in hand.  Once the title is approved, they we move to conveyance drafting and approval and then the mortgage would be drawn down.

 Time to close a cash sale (no mortgage involved) is 60-90 days.  Time to close with a bank mortgage will be 90-150 days.  So keep in mind you won’t be able to take possession of the home for some months while waiting on the lender to do their thing.  Some people will purchase a home in cash and then leverage the cash back out with a mortgage after the purchase as it allows them to take possession of the home sooner.

  •  First step is to get the ball rolling with the bank and get a nod. (about a 1week)
  • Second we put in the offer to purchase, negotiate and hopefully reach agreement in principle (1-2 weeks)
  • Third you retain an attorney top represent you in the transaction, put up a deposit with the seller’s attorney’s ‘Escrow Account’ and the purchase agreement is executed by both parties. (1-3 weeks, this begins the real process of purchase, get appraisal, all paperwork to bank, references, etc.)
  •  Forth, you put in the formal application for financing, provide the bank with a copy of the executed purchase agreement and go through the motions with them. (3-5 weeks) (If Necessary, no bank financing involved, it would skip straight to the title search)
  • If the buyer is getting a permit from the Foreign Investments Board, the application gets put in right away and approval of the permit can take 2 weeks up to 3 months.
  • Then, once the mortgage is approved and you have a commitment letter in hand. Your attorney begins title search. (3-5 weeks)
  • Once title is approved the vendors attorney drafts a conveyance, it gets approved and the vendor executes (2-3 weeks)
  • Then the bank gets a copy of the conveyance and begins to draw down funds. (2-6 weeks)
  • Once the funds are disbursed, the sale closes and you can take possession. (you get the keys).

So, the long and short of it – it could take as little at 6 weeks to close a purchase or it could take as long as 6 months and it all depends on the seller, the buyer, the attorney’s involved, the government for the permits and often most importantly the lender.  So make sure to have the right people involved who are attentive, motivated and on the ball to see the sale happen.

I recently had a sale occur where the buyer’s attorney lost the purchase agreement after the purchaser had signed it and neglected to send it to the seller’s attorney for 3 months.  So while we all thought the sale was proceeding, it hadn’t even started.  Stay in touch with your lawyer and keep them moving things forward.

Lastly, having an experienced and motivated real estate broker or agent on your team can have a very positive effect on ensuring the least amount of frustration and delay.  HG Christie is one company with a strong team of professional sales staff who know the ins and outs of Buying and Selling homes, land and development property around the Bahamas.  Feel free to comment and tell us your story in buying or selling real estate below.  I hope you enjoy this post and find it somewhat useful.

Check out this great write up on Realtor.com if you are buying, selling, re-financing, settling an estate, investing or even considering building.

http://www.realtor.com/advice/sell/five-things-your-appraiser-wishes-you-knew/?cid=soc_20151206_55988936&adbid=673292277788205056&adbpl=tw&adbpr=17351940

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Right now there is tons of activity in the Private Island market in the Bahamas right now. At the moment there are three private island auctions going on.

One is for a group of cays in the North Abaco Chain being sold at Auction in the very near future.  This is going to be one of those rare chances to buy real paradise for a fraction of the value.  Big Grand Cay and its group of cays are spectacular setting and one of those rare playgrounds of sand sea and water that could be entirely yours.  A total of 11 different islands, think of the potential to have a cottage on each one and rent out a little private island to honeymooners, with fully serviced amenities.  The down side is the area is a bit remote but a Cesna Caravan can land at nearby Walkers Cay without a hitch.

check it out here:

http://www.hgchristie.com/properties/abaco/private-island/AS11949/bahamian-estate-must-be-sold–big-grand-cay-archipelago-online-auction-opening-bid-1-950-000/Image

have a look in the Cruising Guide to Abaco, it is one of the hot spot destinations for Anglers heading to Abaco for Fishing. and a key stop off for waterbourne commuters travelling between Abaco and Florida.

Also on Auction is Innocence Island in the Exuma Chain, a large private island with a very rare private runway.  The Bahamas government has put a restriction on it and will not allow anyone to build private airstrips anymore due to the logistics of controlling the airspace here (read US government influence).  In any event this is a rare chance to buy a cay with private runway.  check out the video here:

Otherwise, around Abaco there are some neat options to have a private kingdom in paradise.

Joes Cay, beautiful beaches and only $2.25M:

http://www.hgchristie.com/properties/abaco/private-island/AS10800/joe-s-cay/

Bahama Cays, (formerly the artist known as Fish Cays) some unique features, almost completed mini boutique resort, could be great for the right person.  all the hard work has already been done:

http://www.hgchristie.com/properties/abaco/private-island/AS12330/private-luxurious-island/

People have been wanting and trying to buy Johnnys Cay for decades, and now it is finally for sale.  located between Elbow Cay (Hope Town) and Man O War Cay, you could not find a better strategic position for a private fiefdom anywhere in the world.

http://www.hgchristie.com/properties/abaco/private-island/AS12325/johnny-s-cay-situated-between-elbow–man-o-war-cay-in-the-abacos/

Cave Cay was the site of an attempted settlement many many decades ago.  Had it survived it would have been another charming place to visit along with Hope Town or New Plymouth.  It has caves and harbours and beaches and natural kaleidoscope of landscapes and waterscapes.  it is just waiting for someone with vision to appreciate the natural beauty on offer:

http://www.hgchristie.com/properties/abaco/private-island/AS12183/stunning-private-island-with-two-natural-harbours/

And the much touted, much desired Sandy Cay (confusing but there are 3 Sandy Cays in the Abaco Chain) literally adjoining Man O War Cay.  So you can have fresh baked bread every morning from MOW, swing by for lunch of hang out with the sail shop or boat building fellows.  A unique proposition on offer, the cay has been lovingly enjoyed by 2 sets of extended families over the years.  This is where family memories are made that will endure through to the grandkids of the grandkids.  recently price adjusted to $8M, considering all the toys, boats and extras it is quite an attractive prospect.

http://www.hgchristie.com/properties/abaco/private-island/15135/sandy-cay/

Powells Cay is a developers delight.  large, raw beauty with an excellent labour force minutes away, easy access to infrastructure, this spot is ripe for a unique getaway resort to be developed.

http://www.hgchristie.com/properties/abaco/private-island/AS12305/pristine-powell-cay/

And lastly, Walkers Cay is a fabled island, the most northerly spot in the entire Bahamas.  There is history and fellowship and stories upon stories about this place in its heyday.  begging for someone to come along and redevelop it to its former glory days.  Recreate the celebrated luxury fishing camp and marina of times gone by.  plus government supplied electricity and water, private runway, and deep water channel.

http://www.hgchristie.com/properties/abaco/private-island/AS12219/premier-fishing-and-diving-paradise/

Contact me anytime if you have a serious interest and don’t miss out on the chance at the auctions if you can.  dwayne@hgchristie.com

 

 

 

 

(Apologies for my last post, I wrote it and then it got lost when publishing and wordpress posted it to FB and LinkedIn before I realized the post was blank.)

A few weeks back everyone was talking about a recent video shoot for a new music video that Pitbull shot in Staniel Cay, Exuma.  It shows some great images of the mesmerizing waters of the Exuma Banks, and some shots of the whimsical Staniel Cay Yacht Club.  Staniel Cay is definitely one of those places in the world that should be visited at least once in your life.  It is a magical place, the location of the cave scenes in James Bonds ‘Thunderball’ movie.  At the dock, nurse sharks hang out all day and keep you company.  Personally I don’t think the music video does the cay and the area justice, but it is worth a look:

In other news there is a rumor that Miley Cyrus may be spending time in Treasure Cay, Abaco.  Reports are unconfirmed though.  Treasure Cay is home to a fabulous beach and I’ve taken on a new home for sale, sited right at the end of the point, with the best location and positioning in all of Treasure.  ‘Casa Bella’ is the kind of home dreams are made of and indeed made in.  Endless memories will be created in this stylish beach home.  Check it out click on the photo below for more details:

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Recent happenings of note in the Bahamas include the Bahamas Speed Week which was another success but still lots of growing pains.  The participants say it is one of the most striking places they have raced their cars.  Hope Town held it’s annual Boxcart Derby (racing on a completely different level but just as fun) and despite inclement weather was another huge success – Once again I endeavor to enter a cart next year.  We will see if I can pull it off.

Upcoming event – the 242 Colour run in Hope Town on the 28th December.  This should prove to be an exciting event, where you run/walk/crawl a 5k and get covered in colourful paint?  (?? Seems interesting, maybe I’ll try it out)

I would also mention that New Years in the Abacos is lots of fun.  Very family friendly and each of the cays does it a little differently, but there is always great fireworks, usually some Junkanoo and great entertainment across the island.  Pete’s Pub is often a low key but fulfilling atmosphere to ring it in.  Book early though as all of the rental homes get booked solid for the New Years holiday.

Schooner Bay is now functional, with gas dock, marina, several different villas to stay in, the Blackfly Lodge is open for business and there are now 2 options for eating out plus a newly opened general store which is bound to expand and grow.  Be sure to make plans for an afternoon relaxing by the harbour.

Otherwise in real estate news, it seems 2013 is finishing up on a low note, but signs are pointing to a very much improved 2014.  Florida’s real estate market is 30% up year over year, and has steadied out with inventory dropping significantly.  Typically we see spill over in the Bahamas from 6 months to a year later, so I anticipate we will see some big improvement in our local market in Abaco from around spring time through the summer.

That said, there is still a high inventory of real estate here in Abaco at 620+ listings, and over 230+ of those are single family homes.  Homes are continuing to sell much faster than undeveloped land or multifamily properties.  It is now the perfect time to buy, before the almost guaranteed upswing coming next year.  Things have been improving in market but at a subdued rate over the past 2 years.  Most brokers and agents I speak with around town all agree that there will be significant gains next year.

On the other side of the coin though, Abaco Beach Resort and Treasure Cay are both in need of a fresh injection of energy and would really benefit from new owners.  If these to anchor properties in Abaco were rejuvenated it would have a profound effect on the rest of the Abacos.  Both resorts could be an option for the right investor with the right vision.  Send me a proposal if you are interested.  In other news, there has been some recent activity in the commercial market in Abaco, with some significant properties looking to have new owners in 2014.  All good signs but still fairly muted at the moment.

Newly redeveloped projects are doing extremely well – I mentioned Schooner Bay already, other places to check out are Firefly Resort, The Hope Town Inn and Marina, and Bakers Bay is setting new standards in Abaco.  The Bluff House and the Green Turtle Cay Club are both undergoing improvement works and they’ve recently dredged the channel to White Sound to accommodate larger vessels.  All good news and good things happening around the cays.

Finally, take a look at recent video I’ve shot of a beautiful home on Gillam Bay, Green Turtle Cay.  This is almost the perfect home…http://youtu.be/W0yxqA3XWlc

Now in closing can I ask all my readers to please cross your fingers and send positive vibes that the new Marsh Harbour airport terminal will be finally opened and functioning in January 2014 as has been recently promised.

This may be my last post before the end of the year – Happy Holidays, Happy Christmas, Happy New Year, may 2014 be another wonderful year to add to the memories.

Below is a recent letter I wrote to a prospective buyer client of mine who asked for any advice I had to give on buying real estate for the first time.  As I was writing it, I thought it might be useful to others as well and thought I’d share it on the world wide web!

It has some good information for those looking to start out with a small entry level investment in real estate.  I should add, that when choosing a lawyer, get recommendations from friends, family, and colleagues, ask around, do some homework on them.  Not all lawyers are good at what they do, and you will want to find one with experience, larger companies have more resources to help you, and make sure you feel good about the relationship of working with them.  A good Real estate agent can give you a couple of good referrals too as we work with attorneys everyday…

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Above: a beautiful beachfront Lot for sale in Central Abaco at a great price of $180,000

Here is my letter that you are welcome to read:

Hi Laura (name changed),

Sorry about the delay, its been busy the last couple of weeks.  Feel free to call or email me anytime,

In purchasing your first real estate investment, do not plan to sell it in less than 5 years.  Ideally make it a 10 year investment.  The ideal plan is to pay it off as soon as possible, and then you can use it as security for future loans to buy more real estate (ie a house).  So you’d pay it off, then you can borrow against it.  The banks like that and it sets you up as a good client for credit.

Get the interest rate as low as possible, 7% would be ideal being a first time borrower.  People with history can get as low as 6% but they will probably want to offer you an 8% loan to start with.  Shop around for the best rate.  Get a 15 year mortgage but pay and extra $100 or more into it every month and you’ll pay it off in 8 years or less.  When paying more than the standard payment, make sure you specify that the payment is for principal and not interest.

When looking for a property to invest in, look for one that is priced lower than other properties in the neighborhood.  Make sure it is elevated and not subject to flooding.  Water views are worth money but cost more.  Also you’ll want electricity connections at the lot, ideally you want a home to be near it or less than 500 feet away, that will ensure its re-sell-ability in the future and help maintain value.  And I wouldn’t invest in something that is too far away from amenities.  You can get good prices for more remote areas, but they won’t appreciate in value as quickly.

These properties are higher price than the ones you inquired about but they will likely increase in value more quickly than Bahama Palm Shores.  The reason behind that is they are right in Marsh Harbour and closer to jobs, shopping, dining, amenities, airport etc.  I would consider spending the extra $10,000 and buy one of these…

http://www.hgchristie.com/property-details/abaco/vacant-land/19128/vision-heights-lot-1/

http://www.hgchristie.com/property-details/abaco/vacant-land/17385/lot10-vision-heights/

http://www.hgchristie.com/property-details/abaco/vacant-land/17384/lot-2-vision-heights/

http://www.hgchristie.com/property-details/abaco/vacant-land/17386/lot-11-vision-heights/

But if you are trying to keep your initial investment as affordable as possible, then Bahama Palm has a great beach and is a nice area which will grow slowly and increase in value slowly over time.

This is one of the best options for a lot in Bahama Palm Shores, in my opinion, crown (government) land on the rear boundary, so no neighbors building right up to your back door and ruining your view of the Abaco Parrots and forest vistas.  You could also cut a private path to the beach…

http://www.hgchristie.com/property-details/abaco/vacant-land/AS12268/perfect-place-to-build-a-home-plus-acres-of-crown-land-at-the-back-door/

Closing costs – keep in mind that you will pay half the stamp tax (you half will be 3% of the price) on top of the purchase price, you will also need to pay some legal fees, most law firms have a minimum fee of $900.  So if you bought a Vision Heights lot for $30,000, be aware that you will have to pay another $900 in stamp tax, and $900 in legal fees on top.  So the total cost will be $31,800.

If you are getting a mortgage to buy the property, there will be another 1% stamp tax on the mortgage document, if you borrow $27,000 (meaning you have $3,000 to put down as a deposit plus the $1,800 above in cash) there will be $270 in tax for the mortgage document and then another $400 or so for the lawyer to prepare the mortgage document and have that registered and work with the bank on the documents.  Lastly, the bank is going to have approximately $260 in fees.

So if you purchase price is $30,000, you will be able to borrow $27,000 from the bank and then be prepared to have $5,730 in cash to close the deal.

I hope all of this is helpful.  Let me know if you have any more questions or want to take some time to view the properties.

All the best,

Dwayne.

Dwayne Wallas

Appraiser/Estate Agent

HG Christie Ltd.

Marsh Harbour, Abaco, Bahamas

T: 242 367 5454

F: 242 367 5452

**Side note, I recently arranged an aerial photo shoot of a new listing with a company that uses an RC drone to get the images.  They obtained some fantastic shots of a new listing here in Marsh Harbour – check it out,  European Luxury and Tropical Caribbean Flair. http://www.hgchristie.com/details/abaco/marsh-harbour/house-as12275.

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Nice Job and shout out to Sky High Media.

How similar is the Bahamas Real Estate Market to the US Real Estate Market?  Well for starters, 2 years back I had read from the National Association of Realtors, that the most common house colour of homes that sold was yellow so I decided to find out if that held true in the Bahamas.  And guess what, it is the number one colour of homes sold in the Bahamas, by a very large margin.  Go figure.  The number 2 house colour was blue, which is my personal favourite choice for a home.

Then more recently, I had read that the biggest time to sell a home was Spring and Summer.  According to Realtor.com, “Selling in the spring and moving in the summer is a perfect arrangement for families. Families like to move during the summer to prepare for the new school year. The weather is warm and accommodating for moving and relocating. Springtime, with its blooming flowers and pleasant temperatures, is an ideal time to present your home to the real estate market. Real estate agents boast that over 50 percent of homes are sold during the summer.”

So, does this trend extend to our little real estate market as well?

Thanks to having a proper Multiple Listing Service here in the Bahamas, I am able to tease out some real data on our market place.  Prior to 2008, there was no data sharing, no listing sharing among real estate brokers in the Bahamas.  Trying to figure out the dynamics of the real estate market in the Bahamas either came from straight up guess work, or from decades of experience in the business.  Most decisions and value assumptions were performed inside a small bubble based upon the experience and results of one’s small sphere of business.  Now, the Bahamas Real Estate Association has full embraced the 21st century and on the cutting edge of real estate.  Most recently gaining a datafeed portal to the Realtor.com website.  Now prospective buyers can go to the number one real estate portal in the US and search for real estate in the Bahamas.  This was a massive step forward for the industry in our ‘backward little country’ (I say that having intimate knowledge of my home, and how we function, and some chagrin at how some things get handled here in my beloved Bahamas).  The Bahamas MLS is the number one tool for selling real estate in the western world, and has already become the main tool for buyers and sellers of land and homes in the Bahamas in just under 5 years of existence.

Now to the point, I analyzed the number of real estate sales that were placed under contract during each month as recorded on the Bahamas MLS over the past 5 years to date, and what I found, interestingly supports the trends in the USA.  Perhaps our love affair with our great neighbor to the north has an influence, or maybe it is just fundamentally a byproduct of our school year, fiscal year and indeed April is one of the most beautiful months of the year in the Bahamas.  The seas warm up, the air temperature is not stifling hot yet, the Poinciana trees start to bloom in May.  We have a few showers to bring out the green in the landscape.  The busiest real estate months in the Bahamas are April & May, closely followed by March and September.

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More generally speaking, the Bahamas real estate market is doing ok.  Nassau is definitely seeing a return to a strong and stable market and economy, which I believe is largely a result of geography, being a densely populated metropolis with a large number of visiting tourist and most especially being propped up by the large scale development projects of Bahamar and Albany.  And to a lesser extent the Balmoral project is turning a long at a good clip.  On the flip side, the other islands of the Bahamas have had a struggling year.  Abaco’s struggling market I know about first hand, while my colleagues in Eleuthera and Exuma and Grand Bahama are seeing a similarly flat market.  It is a shame because the lesser developed parts of the Bahamas rely on the real estate component of their economy very substantially, and when real estate drops off it hurts every other sector of the micro economy.  Real estate on our family islands drives the incomes of at least half of the economies of the small settlements scattered around outside of the big city Nassau.  We don’t have large resorts to bring in mass tourism.  When real estate sales activity dries up in Abaco, air travel drops, the restaurants suffer, hardware stores and grocery stores struggle with turnover, it impacts taxi drivers, ferry drivers, boat and car rentals, folks who caretake homes and handle vacation rentals.  Even the lady that cuts my hair says she sees her bottom line affected when the real estate market in Abaco drops off.

I would propose that the pending implementation of VAT (purported to be 15% of all sales in the Bahamas) is having a strong negative effect on the real estate market in the Bahamas and all other parts of the economy.  No one likes to see taxes raised, and when there is an uncertainty, any element of the unknown in the future financial realm it directly affects people’s confidence.  When the confidence is impacted, then prospective buyers or investors, hold off on making large decisions, ie buying or selling real estate.

For instance, I don’t know how this VAT will affect the economy, my life, my financial bottom line.  I don’t know what the fall out will be and how long it will take to smooth the hiccups.  As a result, I’m not going to take any unnecessary risks.  Similarly the level of tax burden has gone up significantly in the Bahamas over the past year, and everyday Bahamians see it and feel it.  So when taxes go up, spending and borrowing drop almost immediately.  So when someone asks me about ‘How’s the real estate market these days?’ – I tell them it is pretty rough, everyone is in a holding pattern to see what the present government will be doing.  It is difficult to try to plan a new project of business venture when you don’t know what your cost of goods is going to be in 3 months, 6 months, a year from now.

So, I hope that things will settle down, I hope we will see a steadier, more predictable business environment to work within soon.  I for one would like to see less rocking of the boat.

For those interested here are the recent remarks by the Deputy Prime Minister at the recent Abaco Business Outlook seminar, where he paints a positive picture, but apart from Baker’s Bay and some agriculture he is hard pressed to make any positive remarks about the economy of Abaco directly:

http://www.thebahamasweekly.com/publish/Abaco-Island-bahamas/Hon_Philip_Brave_Davis_at_Abaco_Business_Outlook_Conference_201330725.shtml

 

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