There’s a turning of the tide in the real estate industry as it approaches the tail end of a decade-long “buyer’s market”, where “those with cash were able to pick up properties for pennies on the dollar”.
Senior broker and appraiser of Colonial Realty Eugene-Gino Maycock said that is evident in the dwindling distressed properties listings on the books at local commercial banks; and the increased demand for properties of all kinds, particularly in recent years.
“I think we’re on the tail end of a buyer’s market. The trend is moving a bit positively in that Bahamians or buyers in this market once weren’t as disciplined. We didn’t know how to save, we didn’t know how to manage our finances or put our finances in order to walk into a lending institution and secure a favorable loan based on our discipline. But now that is changing,” Maycock said in an interview with Guardian Business yesterday.
“So much of the distressed properties that were on the market since 2008, they’re now being absorbed. There is still quite a bit, but we’re on the tail end of it. So, the absorption rate now has been strong and consistent and I’d say a good maybe 70 to 80 percent of those distressed properties have already been absorbed, some may disagree. We have a small percentage left so now is still a good time to purchase, but I wouldn’t wait to late because there’s a changing in the tide.”
This is all, of course, providing that there are no external or global shocks or negative influences in the near future, Maycock said.
As for the seller, the broker said this new increase in demand is proving to be more favorable for sellers and for those looking for a return on their investments, now is the time to sell.
“I think you’re pretty close to getting what you should get. Again, persons are still negotiating and others are making their offers, but you have more interest now in that property so you can just go for the best price,” he said.
And as for buyers, particularly new and first-time investors, Maycock advised looking outside of the high demand city center.
“I’d say for the beginner, it could be anyone. If you can afford a cell phone, a $1,000 Apple iPhone or computer or whatever it is, or want to start throwing money at a car, even if it’s a Japanese model that takes about $3,000 or $4,000, I would say start investing in Family Island property. Identify an island where there’s a local bank and the reason for that is, whatever the lending institution is, they tend to look at that property a little more favorably in terms of collateral and as an equitable property,” he said.
“So, you can pick up a piece of property on Andros, Abaco, Exuma, Eleuthera in some cases as little as $1,500 or $3,000 or $4,000. You can pick that up and own it cash and that’s a start. You’ll have the land and the equity. It’s not going to lose value. It may not have all of the features and conditions you might get excited about today, but who knows what the future looks like. And that’s a place to start. Once you start there you might use that as a stepping stone to securing a more valuable piece because of its equity and its value and that new piece could be on New Providence or on an island that’s a little more prime and you just keep going.”