Baha Mar’s impact on Real Estate questioned
Real estate practitioners vary on how much and how quickly the$2.6 billion Baha Mar project will impact real estate prices in western New Providence, but estimates are as high as a 30%increase by this time next year.
Garnett Ellis, president of Landmark Realty Investments&Appraisal Services told Guardian Business in an interview that such an increase for properties in the immediate vicinity of the development could be’easily’realized, once the right conditions continue to develop.
“If Baha Mar is to get on the road and we have persons back on the job making some money, and once the US moves along, I suppose that around late next year, about October we could see a great turn around[in the industry],”Ellis said.
Ellis, who said that due to greater access to town the west has been attracting a premium on home prices for some time, noted that the added proximity to the resort should increase demand for properties in the immediate area.
Another realtor, Larry Roberts, CEO of Bahamas Realty, also has expectations of increased property values from the Baha Mar development, but told Guardian Business that in the short term he did not anticipate much changes to prices.
“In the very beginning, I feel sorry for people who live in the immediate vicinity of Baha Mar. Who wants to live next to a construction site?”Roberts said.”So I don’t know, properties right next door, their values may go down in the short term.”
Ellis said that his firm did some real estate rentals but were more focused on home sales, whereas Roberts spoke largely of his expectations of Baha Mar’s impact on the rental market in the West. He said that he is hopeful that the resort will help to restore some of the rental market by generally increasing demand, though perhaps not price at first.
“I don’t think the Chinese are going to be big rent-payers myself,”Roberts said.”I think it’s going to make it possible for more properties to be rented. In other words, there’ll be more of a demand.”
According to Roberts, his company has already seen some rentals to people associated with the development.
“It’s not as though the owners of the houses or condominiums they’ve rented are going to get more, it just means they got them rented,”he said.”I think as their demand increases, if it looks as though we’re running out of inventory, then the prices may start to go up. But I think it would be fool-hardy of anyone to think, well I can put my price up now that Baha Mar is going up.”
A caveat also came from Ellis, who said that the recent economic downturn has resulted in more’astute’clients, who understand the expenses associated with maintaining a large home. He said that the larger homes in the area may still be difficult to get sold for a longer time.
Founder of Paradise Sales and Rentals Andrea Brownrigg told Guardian Business in an earlier interview that during the construction of Kerzner resorts the real estate markets received a boost, and she expected the trend to continue in the case of Baha Mar.
“With Kerzner, a lot of opportunities were created for Bahamians,”Brownrigg said.”When Kerzner was building, the management people for construction all needed a place to live so the rental market really boomed on Paradise Island and that’s what spurred a lot of new developments.”She said that as far back as five years ago she had clients trying to get properties close to Baha Mar to be positioned to take advantage of expected increases in real estate prices.
George Damianos, president of Sotheby’s International and Lyford Cay Sotheby’s International Realty, told Guardian Business that he expected in the short term the development will put pressure on the rental market.
“And I think after they get up and running, it more than likely will have an impact on the Cable Beach market values,”he said. Damianos added that there will be a delicate balance at play determining just how much impact the development will have. The ease of access to the resort, for example, will play a role, according to Damianos.
“In other words, if I live in Cable Beach, what direct benefit is it going to be for me for Baha Mar being there, other than possibly renting it to a staff member at Baha Mar?”said Damianos.