Bahamian Buyers may miss Real Estate Opportunities

A Bahamas Real Estate developer has warned that Bahamian buyers "may miss" an opportunity to acquire affordable gated community properties in western New Providence through lack of confidence, with prices in the area only likely to go up.

Speaking as he unveiled a $269,000, two-bed, two-bath condo product targeted at the Bahamian 'young professionals' market, Jason Kinsale, principal of The Balmoral project on Sandford Drive, told Tribune Business that his 'typical buyer' had altered from one who put down a 10 per cent deposit with mortgage financing to 'all cash' purchasers as a result of the recession.

"They're not scared. They know it's a good price and feel more confident," Mr Kinsale said of all-cash purchasers and foreign buyers, Canadians accounting for 50 per cent of The Balmoral's real estate sales over the last six months.

"I know this may sound self-serving," he added, "and that '10 per cent down buyer' may be afraid they will lose their jobs, and are gripped by fear, but a year from now they may not be able to afford to get into The Balmoral, Sandyport or a community of their choice.

"They have to take a little bit of a risk. I think our Bahamian buyers have to take a little more risk, or they will get left behind. They may miss.

"I think we've all come to the conclusion that prices in western New Providence are not going down. A modest increase of 2-3 per cent, and that's another $10,000 that they've got to find. That's the reality of the environment we're in.

"We don't have this infinite supply of product. Sandyport is close to being sold out, Nautica is sold out. There's not this endless supply of product out there." Mr Kinsale said many people were "underestimating the size of the Baha Mar project and not realising the impact this will have on western communities".

Recalling a recent visit to Toronto, where Chinese was the second most-spoken language, Mr Kinsale said that if just 100 Chinese acquired real estate options at the $2.6 billion Baha Mar project - a possible development, given the involvement of China State Construction and the China Import-Export Bank - this would have a major impact on the Bahamas real estate market.

Mr Kinsale said his Toronto trip had "opened his eyes" when it came to providing more affordable real estate options, noting that the Canadian city's most popular offering was currently a 400 square foot micro-condo.

Noting that having a diversified range of real estate products had helped to "save us" at The Balmoral during the recession, the developers now adding two more options to bring the total to seven, Mr Kinsale said he planned to apply Toronto's lessons to the Bahamas - albeit with product right for this market.

Revealing that the 18-unit $269,000 condo option will launch within the next 30 days, Mr Kinsale said: "I think they're going to fly. I think the young professional market has no choices here.

"It's for the investor as well, because the units will rent for approximately $2,200 a month. It's a nice investment package, because there's nothing available at that price in the west.

"I think there's a pent-up demand. Young professionals are just unable to purchase anything right now. If you look at young professionals they're doctors, lawyers, accountants, but they're not always making a lot of money. They have valuable training and education, but are not at the peak of their career yet; it takes a little while to get there."

While the commercial banks had come under fire for being unwilling to lend, Mr Kinsale said credit was still available to those who could qualify.

"I equate that to when I go into John Bull. I know which watch counter I can afford to go to, and which one I can't afford to go to," he added. "People were previously trying to buy stuff they just couldn't afford. Banks are lending; they just want good loans."

In the current economic environment, Mr Kinsale told Tribune Business that rather than the previous '4 P's', real estate marketers now needed to be equipped with five.

Previously, Product, Price, Place and Promotion were the main ingredients. "But with this economy you need to have a fifth 'P', Perseverance. Four are just not enough," Mr Kinsale added.