Bermuda: Price History

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The engine has stalled

Bermuda – an ideal paradise that comes with a catch: properties are very expensive. The average price of a house in this unspoiled region is US$1.2 million and US$780,000 for condominium units, according to Rego Realtors. Prices of condominium units open for purchase by foreigners usually start at US$450,000, and can go as high as US$2.3 million.

The real estate market is now slowing, after a very strong performance in 2004-2005. During 2004, there was an increase of 30% in the average price of homes sold, with an US$80 million increase on the 2003 total value of sales, according to the Winter 2005 report of Rego Realtors.

But the market has stalled in 2006, because of rising interest rates. Bermudian interest rates follow US rates, as the Bermudian dollar is pegged to the US$.

“Basically our market follows US trends,” says Susan Thompson, agency manager for Coldwell Banker JW Bermuda Realty. “As the US housing market has leveled off in the last five to six months, Bermuda has leveled off with it.”

Around 500 new condominium units have been built in the last five to six years. There is now an unusually large ‘free’ inventory of 240 properties for sale, the result of developers responding to the previous perceived housing shortage by rebuilding many lots zoned as multi-occupancy.

Purchasing demand is principally from local buyers, due to the restrictions.

Strict restrictions

The restrictions on buying property are strict. Non-residents need to obtain an Acquisition License from the Ministry of Labour, Home Affairs and Public Security before buying property.

Foreigners can only purchase homes and condominium units currently owned by non-Bermudians. The property must have an Annual Rental Value (ARV) of US$153,000 or greater for houses and at least US$32,400 for condominium units. Non-residents are restricted to owning condominium units only within areas approved for foreign ownership.

Non-Bermudians are also prohibited from acquiring undeveloped property, except for Non-Bermudians who are spouses or children of Bermuda nationals.

The restrictions are even stricter on ‘buy to let’ property.

Properties in Bermuda cannot be rented out or subdivided unless specific permission is granted by the Ministry. Such permission is not a formality. It is possible that a foreigner with some history of residence who temporarily departs would be allowed to agree a long let, but probably only for a year. But after that he would likely be required to put his property into the short-term ‘holiday’ market, which the government wishes to encourage.

Bermuda - more data and information

• British house prices, rents, and letting income - real data!
• How expensive are houses in Bermuda, compared to the rest of Caribbean?
• How much rent can be earned from British property, compared to the rest of Caribbean?

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