Reports on mortgage commitments tell the tale of soft growth trends, according to The Central Bank of The Bahamas’ (CBOB) Quarterly Economic Review report for the second quarter of fiscal year 2018/2019, adding that foreign investment projects still bolster the construction sector.
The report said the commitments, “which partly signal future activity, did not establish firm growth trends”.
According to the report, the construction sector continues to be strengthened by a few small and medium-sized foreign projects on New Providence and in the Family Islands. The central bank notes that projects financed domestically “remained mild” at the end of 2018.
“On the domestic side, total mortgage disbursements for new construction and repairs, as reported by banks, insurance companies and the Bahamas Mortgage Corporation, increased by 20.4 percent ($5.9 million) to $34.8 million, although tapering from the year earlier growth of 44.3 percent,” the report states.
“Residential flows firmed by 5.6 percent ($1.6 million) to $29.4 million, a slowdown from the 38.9 percent expansion in 2017; however, gains in commercial disbursements quickened by $4.3 million to $5.4 million.”
The report also reveals that undisbursed approvals for new buildings and repairs declined by 69 to 77, “while the corresponding value contracted by 41.6 percent, reduced by $5.9 million to end at $8.3 million”.
“No undisbursed commercial approvals remained on the books, in line with the prior year’s developments,” the report points out.
On a high point, interest rates associated with commercial mortgages declined by 1.5 percentage points to 6.26 percent in the last quarter of 2018. Meanwhile, the average rate on residential loans also improved by 46 basis points to 7.04 percent.
Education: Florida International University, BS in Journalism