H O R I Z O N S

This is a poignant question for the Bahamas.  November 4th was historic with the election of the first black president of The United States.  There was a good deal of celebration here, as in the rest of the world but what does the election of Obama mean to The Bahamas?

Before the election there was a mixture of elation and fear in the general population.  People were ecstatic at the mere thought of his election, while at the same time being worried over his proposed stance on clamping down on offshore tax havens.  One of the pillars of our economy is the offshore banking sector with over 400 private banks located in our country.  If Obama were to pressure the banks or take a hands-off approach and let the European countries pressure the Bahamas on it’s tax  policy the results for The Bahamas would not be good.  Time will tell us how his policies will unfold.

On a brighter note, for Real Estate here in The Bahamas we have seen an upswing in buyers for our Mega Properties priced at over $10,000,000.  They are mainly wealthy Americans that are looking to buy offshore before the Obama administration takes office.  We have also seen other US sellers anxious to sell before the Capital Gains Tax gets increased.

As more Obama policies are released I’ll comment on their possible effects on the Bahamas.  Please feel free to contact me if you have any questions or thoughts .

John Christie

We would like to extend our hearty congratulations to our Turks & Caicos representative, Titus de Boer! As of November 1st, 2008, Titus will be heading the Sales & Marketing Division for the Turks & Caicos Sporting Club at Ambergris Cay, as well as continuing in his role of partner and managing director of Lucayan Realty Ltd.

Peter Pollak, President of DPS Sporting Club Development Company said, “Titus is a perfect addition to our Turks & Caicos Sporting Club team as his experience and connections to the Turks & Caicos and European communities are vast.  Titus brings a wealth of knowledge, depth of experience, and almost 20 years of strong business transactions in TCI.  We couldn’t be more excited for him to join our team.”

De Boer’s recent successes have included selling more than 40 units with Royal Reef (totaling more than $32 million) and a $4 million sale in the TCI but he has achieved much more in the course of his career.  A man of many talents and responsibilities, Titus has served as the President of the Providenciales Chamber of Commerce for 7 years, represented the German Embassy in the islands since 1991, and helped with the opening of The Palms Resort in 2004. He has also worked as Vice President of Marketing for a North Caicos company, and in 2007 alone he co-founded Lucayan Realty Limited, as well as being invested as Germany’s first Honorary Consul to the Turks & Caicos.

Titus has sure been busy, but we are proud of his acheivements and all of his hard work.  Congratulations again Titus!

Last week an interesting event happened in the real estate market in the New Providence/Paradise island area. Two unrelated sellers reduced their price by 20% and the result- both are now either under contract or sale pending.

This, in my opinion, provides a clear indication that the markets are still vibrant but buyers are now looking for better pricing that what was previously available. As the Bahamian market becomes more integrated with the global real estate trends, we will begin to be more affected by the state of world affairs which will make our Markets in The Bahamas more dynamic and less static. Previously the Bahamas had been mainly insulated from world affairs in terms of pricing due to a few factors:

1. Many of the buyers were cash buyers and thus, had less monetary pressures to sell in a faltering world economy.
2. The Bahamas was relatively unknown in the real estate markets in the world and the pace was generally slow.
3. In down markets, most sellers would simply stick to their price and hold the property sometimes for years until the market came back and they sold for their asking price. This had the effect keeping the pricing in The Bahamas very stable (if not that liquid).

Today, however, with the growth of the Real Estate market in the Bahamas over the past 10 years and the ability to get mortgages in the Bahamas for non-Bahamians (with substantial down payments), we are seeing many sellers that just are not willing to wait the time it may take to hold their pricing until the market reaches their ultimate sales price, but are rapidly becoming more realistic in pricing and working aggressively to sell their homes.

What we are advising to sellers that want to sell in the next six months is that they will need to re-assess their pricing strategy to fall in line with the buyers’ expectations. The result, as we have seen last week, will be happy buyer and sellers! Please feel free to contact me if you have any questions on this. I can be reached at john@hgchristie.com or 242-322-1041.

One of our H.G. Christie agents, Elbert Thompson, recently contributed to an article in the Nassau Guardian entitled “Make Your Home Easier To Sell.”  In it, Mr. Thompson discusses the importance of curb appeal and making minor renovations saying, “No matter how new or old and stylish your home may be, there are always improvements that can be made whether for necessity or sheer desire to better improve the value of your home.”  He also mentions that if you can’t afford to renovate, at least make sure that you have “nice trees, the yard should be freshly mowed….the house is freshly painted or pressure washed.”

Some of you may be worried about selling your own home in economically unstable times, so I thought we could share some of the tips we give our own clients so that you can put your home’s best foot forward.  Having an agent show your home to potential buyers is like your home going on an interview, so make sure you DRESS YOUR HOUSE FOR SUCCESS.

Inside:

• Vacuum
• Place fresh flowers in main rooms
• Put dishes away
• Make beds and put away clothes
• Open drapes and turn on lights for a bright and airy feel
• Straighten closets
• Put away toys
• Kitchen and bathrooms should shine
• Turn off the TV
• Play soft music
• Toiletries should be put away
• Keep pets out of the way, and pet areas should be clean and odor free
• Keep the temperature comfortable
• Your home should smell great: try potpourri or freshly baked cookies

Outside:

• Sweep the front walkway
• Remove newspapers, bikes, and toys
• Mow the lawn
• Park extra cars away from the property

Remember: you want potential buyers to fall in love with your home and be able to picture themselves in it.  If you follow some of these tips, you’ll make it a whole lot easier for them to do so!

Recently I’ve read two very interesting columns that seem to hold positive opinions for the Bahamian market.

The first, “Americans Still Plan To Travel Abroad In ‘08“, discusses some results of a survey by the Visa credit card company of whether or not Americans will be travelling in the near future and where they plan on going. Of the top 7 tourist destinations named, the Bahamas was one of them, and the article referred to the ongoing popularity of the Caribbean in general.

The second article I read, “City Bankers Still Love Their Caribbean Homes“, seems to agree with much of what we’re already seeing here for ourselves. Those who had money before the Wall St. crisis, still have money after it, and are now simply looking for a more secure and stable place to put it - namely, real estate. We have seen the local luxury market remaining relatively strong, and private island sales have become a good favorite for the elite. This article from The Times predicts that as winter gets closer, these buyers will be looking for a great investment that has the added bonus of being a status symbol while still being a great place to escape the cold and snow.

We continue to be optimistic for the Bahamian real estate market as our own sales are remaining steady throughout the U.S. turmoil.

Overall, we’ve been very lucky and been spared the worst of both Tropical Storm Hanna and Hurricane Ike. Nassau experienced some blustery, rainy days during these storms and the waves remain a bit choppy, but there was very little damage as residents had already battened down and secured all boats for Hanna, and kept it that way through Ike. Shutters still remain up on buildings all over the island.

Prime Minister Hubert Ingraham addressed the media at the National Emergency Management Agency (NEMA) press conference held this week, and said, “I am very pleased that the building codes held up quite well, especially for a Category 4 hurricane, and that the people in the communities followed all the advisories that were given by NEMA and the Department of Meteorology and that we have been spared a major, major disaster.”

Great Inagua sustained the worst weather and according to the Nassau Guardian, over 99% of buildings there have sustained some roof damage. The eye of Ike passed right over Matthew Town, Inagua and winds from this Category 4 hurricane were 135 mph with gusts as high as 160 mph. Damage here was limited to shutters being ripped off, roofs being damaged, and slight flooding. Thankfully, there were no reported deaths or injuries. Morton Salt, the economic hub of the island, has millions of dollars worth of damage and loss, with all main buildings there being damaged, and tons of salt being dissolved by the rain. Morton Salt has now closed down indefinitely, they simply cannot operate with such damage, and the island will surely suffer for it, as over 100 employees will be out of work.

 Grand Bahama received some tropical storm force weather from Hanna whose winds there reached up to 42 knots but they only received some minor, localized flooding and all roads are still passable.

Other islands suffered effects of the bad weather: Mayaguana is trying to deal with a food shortage and Crooked Island has a gas shortage. Both of these are due to the unreliability of shipments to the islands when weather is poor. The mailboat has been unable to bring food to Mayaguana for a month now, and residents are rationing food as all the grocery stores are running extremely low. NEMA has dropped 20 cases of food and water there for the residents, who were otherwise unaffected by the storms.

 Of course, our neighbours to the south, Turks & Caicos, and Haiti had the very worst damage and some have yet to communicate with friends and relatives on those island nations.

The Bahamas has already pledged help to Turks & Caicos, and many Bahamians are trying to do their best, including collecting donations, to help residents in our own family islands.

The Bahamas Multiple Listing Service (or MLS) was launched in March of this year and has already been tremendously successful. With many agencies participating, presently they have 39 active companies, 123 active members, and 493 active listings.  The MLS is now making its mark on the Bahamian Real Estate community.

The Bahamas MLS is available to all BREA members and provides tremendous exposure for the listing property. An owner can list exclusively with a single broker who they know will maintain control of promotion of their property, and the agent, in turn, will then upload the property listing to the MLS site. All other registered member agents will have access to the listing and can maximize exposure by passing the word on to any buyers who may be interested. The MLS also offers services for buyers whereby your HGChristie Agent can set up a profile for you where all new listings in your category will be sent to the buyer for review from all participating companies.

I recently spoke to the MLS Administrator and she had this to say, “As we continue progressing in a positive direction, I anticipate that more agents will now join the MLS to take advantage of this excellent opportunity available to all BREA agents. The cooperation and participation of all agents can only help to make The Bahamas MLS a further success. By incorporating the many tools and services of the system, agents now have a greater opportunity to reach both local and foreign clients.”

“While currently having access to a growing database of  500 plus exclusive properties, members have also found the MLS system to be a valuable asset in their daily routine. By placing their exclusives on the MLS website, members can now take advantage of the offered services to better equip themselves to manage, organize and list properties.”

The agents and brokers of HGChristie, are strongly endorsing the Bahamas MLS because it gives clients a higher level of service, and provides the agents with a great new way to publicize their properties.

For more information on the Bahamas MLS and how we’re taking advantage of this great new resource, contact your local HGChristie agent or email sales@hgchristie.com.

On the 4th of July weekend,  Cat Cay south of Bimini Bahamas,  has never seen so many customers.  The Marina was overflowing where usually it might only be 50% full.  Historically Cat Cay and Bimini would be a stop over on the  way to more extensive travels throughout the Bahamas but due to the high cost of Fuel,  boaters are content to end their travels in the Bimini Chain,   Just  50 miles from Miami. 

With this decision traveling to the Bimini chain gets the US Boat owner a world away from  South Florida without costing the world to get there.   Likewise many yacht owners who prefer to travel further afield are opting to keep their vessels in The Bahamas in Marinas in places like The Abacos,  Exumas,  Grand Bahama,  Harbour Island and New Providence.  This has the effect of acting as a boon to marina owners in the “Near”  Bahamas,  while marina owners further afield are beginning top feel the pinch. 

The government of the Bahamas yesterday took a big leap in lowering taxes which we believe will be beneficial to the economy.   There are a number of changes afoot that pertain to the real estate industry and will affect our clients and customers.   These are in the property tax areas and stamp tax areas.

The changes are as follows.

The Cap on Property tax of $35,000 per annum for homes valued at over $5,000,000 will be removed

Import duties on construction materials  be removed for the following islands

 • Sweetings Cay and Water Cay (Grand Bahama);
• Grand Cay and Moores Island (Abaco);
• Current Island (Eleuthera);
• Andros;
• Cat Island;
• San Salvador;
• Rum Cay;
• Long Island;
• Crooked Island;
• Long Cay;
• Acklins;
• Ragged Island and Cays;
• Mayaguana; and
• Inagua

Home-owners will become eligible to benefit from the following additional revenue measures:

• exemption from the payment of Stamp Tax (a) applicants purchasing a lot zoned for residential development upon which he/she proposes to construct a primary dwelling place;

(b) applicants purchasing a newly constructed dwelling place; (c) applicants purchasing a dwelling unfit for occupation with the intention of occupying the dwelling upon completion of its renovation or (d) applicants purchasing an existing dwelling to serve as their primary residence.

• exemption from Stamp Tax on the transfer of a mortgage of a dwelling place from one financial institution to another, and exemption from stamp tax where the applicant seeks to consolidate debts by mortgaging a dwelling home up to a value of $500,000.

• First-time homeowners will benefit from an increase in the ceiling for exemption from real property taxes, from $250,000 to $500,000, for the first five years.

Property tax will be reduced to .75% down from  1% on properties valued at over $5,000,000

If you have any questions on how this will affect you please free to call me (john Christie at 242-322-1041) or any of our professional agents throughout the islands.

Yesterday, I found an interesting and fitting set of comments by J.W. “Bill” Marriott, Jr., Chairman and CEO of Marriott International, Inc. in his address to the World Travel and Tourism Council summit last week in Dubai. Today’s post title came from his speech.

Amidst telling the crowd that the Marriott organization was reducing its impact on the environment by buying 50 million recycled BIC pens and offsetting its 2.9 million ton carbon footprint by sponsoring the protection of 1.4 million acres of Amazonian forest, Mr. Marriott inferred that carbon-wise, tourism and travel was a more available - perhaps more responsible - economic activity than manufacturing or primary resource.

Mr. Marriott’s observation is something we in the Bahamas have known for some time, although more from situation than choice. We do not have natural resources in any type of quantity, and secondary manufacturing relies on factors we cannot provide.

Travel and tourism is the lifeblood of our country, whether it be the casual short-term visitor, or those who have a long-term relationship in the form of a second home. We are recently experiencing additional traffic in the form of international travelers other than Americans who are showing a preference for visiting and buying in places other than the US, due to stricter homeland security routines at US airports.

Tourism is The Bahamas largest export, generating much welcomed revenues. But relative to global warming, purity of air, and wasteless use of energy, is our version of operating such activity a responsible one?

According to Larry Smith writing in BahamasPundit.com, the Caribbean region’s carbon intensity relative to GDP is currently the world’s highest. Being a relatively small country, this is not necessarily bad news for the Bahamas. Again, citing information in Mr. Smith’s blog, a reduction of 36% could be experienced with working out our technical inefficiencies, and we could become carbon-neutral with some additional individual effort.

Even the smallest activities contribute. When the issues of global warming were brought to light fifty years ago, nations who lead the charge into global responsibility rallied their early efforts behind, ‘reduce, reuse, recycle’. A growing number of our visitors and new residents come from parts of the world where this not just a slogan but a way of life. Uncomfortably, I have heard their observations many times on how the Bahamas should generate its electricity with solar and wind energy rather than diesel, begin aggressive recycling programs, mandate more efficient transportation vehicles, sail rather than motor (my personal favourite… ), and develop its own agri-food production rather than import.

Certainly not that this is the only reason, but the effects of our country’s aggressive participation in the global effort toward stabilizing the environment translate rather directly to the industry of real estate in the Bahamas. Bluntly, should the world’s icecaps melt, the Bahamas land mass will be surrendered beneath the rising waters.

As the world turns its consciousness to supporting organizations and businesses that clearly demonstrate responsible stewardship of the basics of life - air, water, energy, temperature - it is obvious that it is now well past the time for those of us in the Bahamas to individually and collectively see what we can do right here in our own country toward reducing our nation’s disproportionate carbon footprint.

This works on two fronts - first, we are behind the rest of the world in getting on board. Our effort will do nothing but help. Second, we will most assuredly be passed over as a desirable destination when an environmentally aware prospective visitor finds us lacking in effort.