Housing Prices in Bermuda

I am so busy with year end right now that don't really have any time to post any updates, however I did find this article from todays Royal Gazette to be quite interesting on the price of housing here in Bermuda. Readers should note that the article is referring only to the price of housing for BERMUDIANS as foreigners are limited to purchasing homes in excess of 2 MILLION and must also pay a 22.5% stamp tax on the purchase price ( there are no recurring property taxes here, the stamp tax is a one time tax) so if you were able to buy a home for 2MM,it will cost you 2,450,000 before legal fees.

Article published Jan 10, 2007
HOUSING
Average cost of houses hits $1.6m
Middle income Bermudians turning more to condominiums – which average $900,000
The average price of a stand-alone Bermuda home soared to $1.6 million in 2006.
That translates into a 30-year mortgage of more than $11,400 a month at current interest rates – assuming the buyer has paid out a five percent deposit of $80,000.
The revelation came in end-of-year commentaries from two of the Island’s leading realtors, Coldwell Banker Bermuda Realty and Rego Sotheby’s International Realty.
And the $1.6 million figure was based on completed transactions recorded through the first 11 months of last year.
Better news for buyers is that the inventory of properties for sale is at an all-time high, giving home seekers a greater choice and shifting the market in the purchaser’s favour.
While the escalating price of free-standing homes is moving them further out of the reach of middle-income Bermudians, realtors say locals are showing increasing interest in condominiums as a more affordable option for a home.
Coldwell Banker’s “2006 Year End In Review”, written by agency manager Susan Thompson, concludes that prices of all types of property remained little changed in 2006. “The average condo will cost you just under $900,000, about the same as 2005,” Ms Thompson wrote.
“To purchase a single family home you will need approximately $1,325,000, depending on location, acreage, condition, etc., with little to no change from the previous year.
“Approximately a quarter/third acre of land will command $525,000 and up, once again with little change from 2005.”
Becky Paris, a sales associate at Rego Sotheby’s, writing in Island Property News, stated: “In the period of January to the end of November 2006, there were 291 (property) transactions recorded at the Registry General’s office, with a figure of almost $344 million traded.
“The average price of a free-standing home soared to $1.6 million and remains out of reach for many; consequently real estate was a hot topic at the sustainable development talks that dominated the media.”
St. George’s had the highest average property price of $1,492,203, said Coldwell Banker, adding the inclusion of Tucker’s Town – the Island’s “Billionaire’s Row” – skewed the figures for that parish.
In fact, a Tucker’s Town house known as Frick’s Point was the highest-priced property to be sold in 2006, at around $20 million.
Coldwell added that Sandys was by far the most affordable parish, with an average selling price for all properties of $728,333, while Hamilton Parish came a distant second at $902,110 and Warwick third at $952,370.
Apart from a significant slowdown in transactions during the second quarter, and then a rise in activity over the following three months, 2006 had been very much “business as usual” Ms Thompson concluded.
“The most noticeable change was more choices for the buying public and more flexibility by the sellers,” she added.
“Our forecast for 2007 would be an increased interest in real estate, particularly in the buoyant luxury market, continued purchase by multiple family members for investment and an ongoing trend towards buying condominiums, which Bermudians now seem to embrace.”
Ms Paris expressed Rego’s outlook for the year ahead: “With money still to be made in property, we are likely to witness the Planning Department working at full steam to deal with more applications to subdivide, build, go up and go out.
“The market seems to have shifted in favour of the purchaser so expect a better value to price ratio.”
Although not all property transactions for 2006 have yet been recorded in the Government archives, Coldwell Banker estimated that the total of closed deals would be down by around ten percent.

WHAT IT WOULD COST YOU
All figures based on a 95 percent mortgage, at an 8.25 percent interest rate and a 30-year amortisation period.
Property price Deposit (5%) Total borrowed Payment
Average price of a free-standing home in 2006
$1.6 million $80,000 $1,520,000 $11,419.25/month
Coldwell Banker’s estimated average price of a single family home
$1.32 million $66,250 $1,258,750 $9,456/month
Average price of a condominium
$900,000 $45,000 $855,000 $6,423.33/month

(Mortgage figures calculated by Butterfield Bank online mortagage calculator)