Officially known as the Commonwealth of the Bahamas, this island chain off the south-eastern coast of Florida is composed of more than 3,000 islands, islets, rocks and cays, only 29 of which are inhabited.
One of the America’s most prosperous and stable economies, the Bahamas was known for a rather different reputation when it was still a lonely Caribbean outpost of the British Empire in the first half of the 20th century. In fact no less than Duke of Windsor Edward VIII and a former governor of the islands infamously called the Bahamas a third-class British colony.
However, modern political and economic development began to emerge after the Second World War. The first political parties were formed in the 1950s; its economy – based on the twin pillar of tourism and offshore financing – began to prosper; and the British made the islands internally self-governing in 1964. In 1973 it gained its independence from Britain, marking the birth of a politically stable democracy, one of the few in the Caribbean.
Today the Bahamas has comprehensive and modern infrastructure, particularly on the two major islands, New Providence and Grand Bahama, where most of the population live. Its economy is estimated at US$6 billion, 60% of which comes from tourism-related activities and 15% from financial services. The country’s per capita income is US$20,000, one of the highest in the Caribbean region. Market overview As a market closely tied with the US economy (about 80% of buyers here are Americans), the Bahamian real estate was hit hard by the global downturn and is yet to see a stable recovery. According to Everett Pinder, a real estate agent with Treasure Cay Real Estate, prices dropped by as much as 30–40% between 2007 and 2010, depending on the area, and prices are still down that far.
However, there are indications that the market is stabilising. According to Savills’ James Burdess, prices have steadied in 2012 and sales volume is increasing thanks to bargain hunters looking for fabulous yet affordable second homes. Many buyers, especially those from the USA and the UK, are now returning to the market, and interest from Latin America and Asia is also increasing.
Properties in the capital Nassau in New Providence Island tend to command higher prices as the city is within an easy reach from the USA, Canada and the UK (JetBlue, United, Delta, US Airways, British Airways, and Air Canada fly regularly here). In addition, Nassau has more shopping and nightlife.
In 2014 Nassau will see the largest casino complex in the Western Hemisphere with the opening of Chinese-funded Baha Mar on Cable Beach in New Providence. Dubbed a ‘mini-Las Vegas’, it will have 2,200 hotel rooms, the Caribbean’s largest casino, five acres of conference facilities, a Jack Nicklaus-designed golf course and 307 private residences and villas for sale.
Aside from the main island of New Providence, several developments are well underway in other Bahamian islands. One of which is the 220-acre Schooner Bay on Great Abaco.
A buyer’s guide
According to Island Living Real Estate’s Rachel Pinder, the Bahamian real estate market is on a path to recovery. ‘Most experts agree, with money cheap to borrow and houses cheap to buy, the time to invest is now.’
Being an investor, though, is easier said than done, with many factors that need to be considered before first-time buyers take into consideration buying a property in the Bahamas. These factors include: Choose a property that suits your goals. Do you want to be a landlord or are you going to hire a property management company? In addition, do you want an apartment, a condo, a home or a land to develop? Organise a team of professionals starting with a reputable real estate agent and a lawyer. Experienced ones understand the market and can show you properties that will help you make the most of your investment. As always: location, location, location. If your goal is to rent the house out, then pick the right location. Houses located in touristy areas are always a safe bet. If your property offers the most number of features, such as being close to commercial areas yet within walking distance from the beach, then it’s likely to attract the most number of renters.
According to Coldwell Banker Real Estate LLC, non-Bahamians who do not own property in the Bahamas and who are buying less than two acres for single-family use need only to register their investment with the government. The same principle applies to non-Bahamians buying improved property under two acres, which is developed as a single-family residential property. These owners of second homes in the Bahamas may apply for an annual homeowner’s resident card at the Immigration director. However, a government is required if the property to be purchased is intended for non-single-family use and is over two acres. In addition, a graduated tax is payable on the conveyance of all real property based on the following value:
(NB: The Bahamian dollar is pegged to the US dollar on a one-to-one basis.)
First-time homeowners, upon successful application, are exempt from paying stamp duty on homes valued below B$500,000. The stamp duty is generally shared equally between buyer and seller, unless otherwise agreed upon.
In addition, the first B$250,000 on owner-occupied residential property is tax exempt. The rate for properties worth B$250,000–500,000 is three quarters of 1%, while those over B$500,000 are taxed at a rate of 1%. As of 2013, there is a ceiling of B$50,000 on owner-occupied homes.
What to buy
There are a number of developments that will grace the many islands of the Bahamas over the next few years, one of which is Baha Mar, which is set to change the landscape of New Providence Island is Baha Mar. Scheduled for completion in December 2014. Dubbed mini-Vegas, this B$3.5 billion resort and casino complex is located about 10 minutes from the capital’s airport , is funded by China’s Export-Import Bank and will have four hotels and 307 upscale private residences and villas.
For more information: www.bahamar.com
Another notable development is the gated resort community of Treasure Cay, Abaco, where a newly built, four-bedroom unfurnished house sitting on a 1,421-square-metre lot is listed at B$2.995 million. This single-family, waterfront property has a built area of 450 square metres, including covered veranda and garage, set on a landscaped lot.
For more information:www.bahamasrealty.bs/view/Abaco+Islands/Brigantine+Bay+Home/567237/buy/