Archives for posts with tag: Abaco islands

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.

2017-jan-market-chart

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.

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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

 

 

 

 

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