Bad saving habits huge factor in real estate market, says Pantry
The notoriously bad saving habits of Bahamians is a huge factor restricting them from participating in this country’s real estate market, Royal Bank of Canada’s (RBC) Vice President of Business Development for the Northern Caribbean Robert Pantry, said yesterday while touting the recent reduction in the prime rate by the Central Bank as a factor that could boost lending by commercial banks.
Pantry, speaking to Guardian Business at the opening of the Harbour Island office of Better Homes and Gardens, a subsidiary of Mario Carey Realty, said despite many campaigns by banks to improve the level of savings in this country, the rate of saving among Bahamians has not improved.
While he could not give figures, he said consumer spending is one of those major factors keeping Bahamians from “feeding the pig” as a popular public service ad calls the act of saving. In other words, Bahamians are not putting anything in the piggy bank, savings account or mutual fund.
These factors have seen young Bahamians especially struggling to qualify or mortgages and lagging behind in breaking into the homeowner market.
“We’ve seen a decline in car loans over the past year, but the demand for mortgages remains high,” Pantry said. “But less people are qualifying for those mortgages.”
Pantry said the prime rate reduction could stimulate an increase in the disposable income of a lot of families, though he said Bahamians will have to wait to see how it will benefit and what kind of boost it might generate for the economy.
In the meantime, RBC is continuing its campaigns to encourage Bahamians to save and make better decisions with regard to their spending. By reigning in spending, Pantry said, more Bahamians will be able to realize their dream of home ownership.
Owner of Mario Carey Realty, Mario Carey, said the taxes associated with real estate are also still too high.
“I still think the cost of the real estate transaction is too high with the VAT and stamp tax,” Carey said. “Banks are doing what they can to try to lend money.”