|The Bahamas Investor Magazine
January 1, 2016
January 1, 2016
Luxury island living is a dream of many, but a reality for only a select few. For those that can afford it, the choice of high-end properties in The Bahamas is extensive, ranging from colonial villas to rambling European- style estates to celebrity haunts.
“The supply of luxury properties remains high,” says Sarena Irwin, regional vice president of New York- based Concierge Auctions, which has sold several luxury estates in The Bahamas including The Boat House in Freeport and multiple waterfront homes. “Savvy buyers are able to get premier properties at good values. Unique, high-end properties are able to command market value, which has stabilized for desirable properties.”
However, this hasn’t always been the case. The luxury property market in The Bahamas has been through a cycle of peaks and dips, with locations coming in and out of fashion. The Rat Pack era of the 1950s and 60s saw Nassau become the sunspot of choice for Hollywood’s elite, with vast beachfront mansions playing host to lavish parties and opulent gatherings. The 80s saw the rise of the hedge fund kingpins and big business moguls, who bought up Family Island properties and luxury holiday condos as second residences.
The next couple of decades saw more fluctuation in the market as the world economy went into cycles of booms and busts, continuing right up until the most recent and prolonged recession. But there will always be wealthy people and they will always want to buy a slice of paradise, particularly in a jurisdiction such as The Bahamas where there are no capital gains or inheritance taxes, and real property taxes are low. It is also highly regulated, with easy access to major international cities.
“I would say that the market is back to pre-recession levels,” says realtor John Christie, chief executive officer of H G Christie, one of The Bahamas’ largest full-service real estate agencies. “In fact, we have never had as much interest followed up with sales in the general luxury market as we have had this past fall. We are expecting a solid winter season also. As long as the world economy holds up, it looks like The Bahamas will have a strong few years ahead in the property market.”
Trends in the market
According to Christie, luxury houses and condos are the most popular. In Nassau, he says that the new condominium offering from luxury complex Albany is performing well, whereas more traditional high-end communities such as Old Fort Bay have had a number of recent sales, with pricing that would not have been achieved a few years ago.
Heather Peterson, broker and certified previews specialist at Coldwell Banker Lightbourn Realty says that “buyers are increasingly looking to settle in gated communities which offer in-house amenities including beach clubs, golf, private memberships and restaurants.”
Developments such as Palm Cay, which is a private oceanfront community situated on 69 acres, with more than 300 beachfront homes, condos, marina and clubhouse, are positioned well for a share of the market. “Our top properties are beachfront townhouses, which sell for around $900,000,” says Richard Browning, general manager at Palm Cay Development Co Ltd. “High-end properties in exclusive communities with added value have held up over the recession period and did not see the dip that affected single residential properties. High end is where the stability tends to be, so wise, long-term investors always look here.”
The Caves Heights luxury condo complex has been steadily building a reputation in the high-net-worth market overseas. “We’ve seen a significant increase in the number of foreign investors expressing interest in properties priced above $500,000,” says vice president of sales and marketing Gustaf Hernqvist. “The demand for these condos is extremely high now there is an increased awareness of the strong investment potential in The Bahamas, with the remaining available units now becoming an exclusive commodity.”
In Lyford Cay, Nassau’s premier exclusive community in western New Providence, there is little on the market at the moment, says Christie, which, he adds, bodes well for sellers. “People are definitely achieving their price goals and properties that have been on the market for a number of years have now sold. Ocean Club Estates on Paradise Island has also had some solid sales, although the demand there is not as strong as it is in the western communities.”
Other islands are also seeing market growth. “Mainly our sales are in Nassau, but the Abacos are very strong and Eleuthera is also coming on,” says Christie, noting that last year there were “significant private islands that sold and went under contract.”
Peterson also says that although the high-end exclusive communities in Nassau are increasingly popular among HNWIs, the luxury realtor has “seen a great run of high-end beachfront estates recently on Harbour Island and lots of activity on Kamalame Cay [off Andros], a small, private boutique resort offering vacation properties.”
For Concierge Auctions, sales have been concentrated on Grand Bahama, “but we also have properties heading to auction in both Abaco and on Paradise Island,” says Irwin. “All the islands are gorgeous in their own right and have their own unique appeal.”
Types of buyers
Traditionally buyers of high-end realty in The Bahamas have come from the UK and North America, but globalization has lead to a broadening of the market. “The majority of our sales have been US buyers, predominantly from the Northeast, but several have been sourced from our database, which includes more than 100,000 prospective buyers globally,” says Irwin.
Bahamian realtor H G Christie is witnessing growth in emerging markets: “We are still seeing people coming in from the UK, Europe, including domiciles such as Monaco, but increasingly from South American countries,” says Christie. “Especially from Brazil.”
The buoyant market is playing into the hands of owners and auctioneers, and consequently property owners who want to sell, as the added element of competition through bidding drives up prices. “Sellers want control of the date certainty of their sale, and of course want to maximize the value of their property in any way they can,” says Irwin. “They are looking to the auction platform to accelerate the sales cycle. Our buyers are seeking quality luxury properties at fair market values, and when put into a competitive situation, they are paying even more to own them.”
Although high-end properties have mostly proved sound investments, island living on that scale doesn’t come cheap, and as the adage goes, if you have to ask the price then you probably can’t afford it.
Concierge Auctions, in partnership with Sterling Bahamas Realty Ltd recently handled the exquisite Georgian estate Kilkee House at the western end of Paradise Island with a starting price of more than $10 million. The two-acre beach- and bay front property is only accessible by boat and was once a party hub for the likes of actor Sir Richard Harris and The Beatles. The New York company also recently sold Innocence Island– 681 unspoiled acres located in the Exuma chain, which sold to the highest bidder for $18.7 million.
“Prices have stabilized and sales activity is increasing as buyer confidence grows. We have completed 100 per cent of our sales in the Caribbean region, at an average sale price of more than $6 million,” says Irwin. “As luxury buyers continue to seek unique exceptional properties, The Bahamas remains an ideal location to invest in and enjoy the lifestyle they can afford.”