The Bahamas Residential Property Market Analysis 2025

Transactional activity in the Bahamian housing market has moderated from its post-pandemic peak, but the market is expected to stay robust, supported by close ties to the United States and resilient demand for high-end properties in sales and rental segments.

This extended overview from Global Property Guide covers key aspects of the Bahamian housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

• Market Defining Features and Trends
• Real Estate Hotspots
• Supply Highlights
• Rental Market
• Mortgage Market
• Socio-Economic Context

Market Defining Features and Trends

The Bahamas has solidified its position as one of the premier destinations for foreign property investors, attracting interest for its favorable climate, strong tourism industry, luxury real estate offerings, tax advantages, political stability, and close proximity to the United States. According to the latest regional report from Knight Frank, American buyers dominated the foreign property market throughout 2024, followed by investors from Canada and the European Union. "As many as half of the wealthy expats in the Bahamas are permanent residents, up from about 20% before the pandemic," the report noted.

The country offers significant financial incentives to investors, imposing no income, capital gains, or inheritance taxes, and maintaining a straightforward process for foreign property ownership. Economic Permanent Residency (EPR) can be obtained through qualifying real estate investments or Central Bank zero-coupon bonds. Effective January 1, 2025, the minimum qualifying investment increased from BSD 750,000 to BSD 1 million (equivalent to USD 1 million, as the Bahamian dollar is pegged to the US dollar at parity), with assets required to be held for a minimum of ten years.

In the 2025 Knight Frank Wealth Report, The Bahamas ranked 31st in the Prime International Residential Index, which tracks prime residential property performance across 100 luxury destinations worldwide. While annual price growth in the Bahamian prime residential sector moderated to 5.1% in 2024, down from the post-pandemic surge of around 15%, the rate still exceeded the index's global average of 3.6% and the 3.7% increase seen across other leading "sun" destinations.

Data Source: Knight Frank.

Mirroring trends observed in other Caribbean markets, the Bahamian housing sector is distinctly segmented between a high-end luxury market, primarily driven by foreign buyers, and a more affordable housing market catering to local residents. The luxury segment is concentrated in areas such as Nassau, Paradise Island, and Exuma, where international investment continues to fuel demand. This sustained interest has led to increased construction activity and higher building permit values in the premium segment, although the number of new housing units has remained subdued.

Conversely, the local affordable housing market continues to face mounting challenges. Supply has not kept pace with demand, resulting in escalating rents and home prices. Many Bahamian residents struggle with affordability due to economic constraints and limited access to financing. Despite ongoing government initiatives, the shortage of affordable housing remains a pressing concern, leaving many low- and middle-income families unable to secure adequate accommodation.

Real Estate Hotspots:

Housing Market Dynamics in Key Residential Areas

The Bahamian real estate market spans several distinct islands, each with its own dynamics and investment profile. New Providence, home to the capital Nassau, remains the country's primary hub, offering a diverse mix of properties ranging from luxury oceanfront estates to mid-range urban housing. Adjacent Paradise Island continues to lead the high-end segment, supported by exclusive resort developments and steady international demand.

Among the Family Islands, Abaco is witnessing renewed momentum, driven by infrastructure upgrades and its growing appeal among boating and lifestyle buyers. Eleuthera attracts purchasers seeking privacy and unspoiled natural surroundings, while Exuma stands out for its portfolio of luxury second homes and private island developments. Long Island, though still relatively undeveloped, offers affordability and strong long-term growth potential.

Grand Bahama provides comparatively more accessible residential opportunities than Nassau, although prices for premium waterfront and canal-front properties can approach those seen on more established islands. The island presents notable potential for commercial revitalization, particularly in Freeport and Lucaya, where investors are drawn by proximity to infrastructure and emerging amenities.

Residential Demand and Submarket Trends

According to Graham Real Estate data, 169 residential property sales were recorded across The Bahamas during the first half of 2025, marking a sharp 44.59% year-on-year decline. Despite this slowdown in activity, market indicators suggest resilience: as of Q2 2025, median days on market decreased to 112, while pending sales increased from 137 to 173, serving as a "strong indicator of forward demand."

While the average sales price in Q2 2025 fell to USD 780,739, the half-year average remained solid at USD 1,206,190, signaling a "broadening of the transaction base" rather than a market correction. Meanwhile, the median sales price rose on both quarterly and half-year bases, reaching USD 512,500 in Q2 (up 9.04% year-on-year) and USD 600,000 for the first half overall (up 41.18% year-on-year).

"While activity cooled, the data suggests that serious buyers remained active, and sellers continued to achieve strong results - pointing to a resilient, high-quality market heading into the second half of the year," commented experts in their latest mid-year market snapshot.

Data Source: Graham Real Estate.

Regionally, New Providence accounted for more than half of all transactions, though the decline in average sales prices indicated a shift toward mid-market homes and condominiums. "Demand remains strong; it's simply adjusting to more practical price points," noted analysts from Graham Real Estate. Exuma, by contrast, recorded the highest average prices and the largest annual increase in median sales price, underscoring ongoing demand for high-end homes despite a slower pace of activity, with just five transactions closed in the first half of the year.

Residential market dynamics, submarket snapshot:

Experts from Savills note that, although the rise of remote work and the continued influx of professionals relocating from urban centers have sustained demand, market activity has moderated from its post-pandemic peak. Looking ahead, the Bahamian real estate market is expected to remain robust, supported by the country's close ties to the United States, positive economic fundamentals, and the limited supply of beachfront property. However, growth is likely to proceed at a more measured pace, with Knight Frank projecting only a slight uptick in sales activity through 2025.

Graham Real Estate experts further highlight that recent amendments to The Bahamas' VAT and real property legislation, effective from July 2025, are expected to shape transaction dynamics. The new framework introduces stricter compliance measures, including mandatory registration of conveyances within 180 days and the requirement to obtain and settle VAT invoices from the Comptroller prior to execution. It also establishes joint liability for VAT payments among attorneys, agents, and sellers, with penalties for delays or inaccuracies. While these reforms aim to enhance transparency and improve tax compliance, they may temporarily increase administrative burdens and extend closing timelines in the near term.

Supply Highlights:

Rising Construction Values Reflect Market Polarization

Supply of new housing in The Bahamas remains subdued and heavily concentrated in high-end luxury developments aimed at international buyers and affluent second-home owners. According to the latest data from the Bahamas National Statistical Institute (BNSI), the number of residential units completed in the first half of 2024 increased by 3.32% year-on-year, reaching 311.

This slight rise does little to offset a broader structural decline. The International Monetary Fund (IMF) research highlights that completions have trended downward since the 2008-2009 global recession, with 2023 levels standing 64.4% lower than the country's 21st-century peak of 1,705 homes in 2006.

While the volume of new housing has weakened over the long term, the value of projects has been climbing consistently, underscoring a shift towards larger and higher-end developments. In the first half of 2024 alone, the total value of completed units rose by 126% year-on-year, pointing to sustained demand for upscale properties despite the shortage of broader supply.

Commenting on the imbalance in the market, Matt Sweeting, CEO of 1Oak Bahamas, cautioned that demand for housing, particularly in the affordable segment, will exceed supply for "at least the next five years." He attributed the persistent shortfall to rising costs, supply constraints, and chronic under-investment in lower-priced housing.

Data Source: BNSI.

Forward-looking indicators suggest no imminent recovery in construction activity. The number of residential building permits issued in the first half of 2024 rose only marginally by 0.67%, pointing to stagnation. However, the value of permits increased by a robust 21.36%, once again reflecting the dominance of higher-end projects.

Data Source: BNSI.

At the regional level, residential construction remained concentrated in New Providence, which accounted for nearly three-quarters of all permits issued nationwide despite a 7.1% decline in volume. The island also recorded a 137.6% year-on-year increase in the value of completed units, reinforcing the concentration of high-value developments. In contrast, Grand Bahama posted more balanced growth, with permits up by one-third and completions rising 17.5%, suggesting a modest recovery in local construction activity.

The affordable housing segment, while largely driven by government initiatives, continues to be overshadowed by luxury market activity. At the 2023 Exuma Business Outlook conference, Keith Bell, Minister of Housing and Urban Renewal, underscored the severity of the shortage, citing a "12,000-plus" unit deficit and even suggesting that "there's no such thing as affordable housing" in the current market.

The IMF has echoed these concerns, noting that "the authorities have sought to increase the supply of residential housing and improve housing affordability, but there is room for additional support." It emphasized that public spending on housing in The Bahamas lags significantly behind regional peers, advising that "alleviating supply constraints and increasing public spending on affordable public housing may help to improve housing affordability in The Bahamas." At the same time, the IMF warned that incentives for short-term rentals should be carefully managed to avoid further crowding out of already limited residential investment.

Rental Market:

Continued Prevalence of Luxury Vacation Homes and Short-Term Rentals

The rental market in The Bahamas is substantially skewed towards luxury vacation properties and short-term holiday rentals, while the lack of affordable supply remains one of the most relevant issues for the local population, with many households priced out of homeownership (during the 2010 Census, nearly 35% of private dwellings in the country were reported to be occupied by paying tenants, and further 5.9% leased or occupied rent-free).

In the long-term rental segment, research conducted by Global Property Guide in June 2025 found asking rents in The Bahamas at an average level of USD 2,200 for 1-bedroom units, USD 3,200 for 2-bedroom units, USD 4,500 for 3-bedroom units, and USD 8,000 for larger units with 4 or more bedrooms. The corresponding gross rental yields averaged 6.52%, only marginally down from 6.63% previously reported in October 2024.

According to a guide from the local brokerage MCR Bahamas, rents for luxury vacation homes can differ a lot depending on location, size of the property, and amenities offered, as well as the season (peak months typically being December through April):

• High-rise condos: USD 2,000 to USD 5,000 per month;
• Vacation homes: USD 2,500 to USD 6,000 per month;
• Rental homes with a pool: USD 2,500 to USD 8,000 per month;
• Beach houses: USD 3,000 to USD 10,000 per month;
• Beachfront villas: USD 4,000 to USD 40,000 or more per month;
• Luxury villas: USD 6,000 to USD 60,000 or more per month;
• Beachfront villa residences: USD 4,000 to USD 390,000 or more per month.

The Rent Control Act (RCA), introduced in The Bahamas in 1975 (and most recently amended in 2008), stipulates that rents shall not exceed 20% (p.a.) of the assessed value of the property. However, it only applies to properties with a total value of USD 75,000 or below and doesn't cover luxury vacation homes. Furthermore, the legislation is often seen as outdated and unable to protect the tenants amid continuously growing property costs. "With the explosion in Bahamian property values, most duplexes and triplexes - and even single dwelling homes - are not captured by the provisions for rent control," The Tribune wrote in 2023.

Along with other popular holiday destinations, The Bahamas has also seen rapid development of the short-term rental (STR) segment in recent years, despite the slowing growth of residential housing stock. A recent IMF special issues report noted that between 2018 and 2024, the total number of properties listed for short-term rent across the islands expanded from about 4,000 to over 7,000, with the strongest growth observed for properties classified as apartments, condos, or lofts. More recently, in August 2025, based on AirDNA data, the Central Bank of The Bahamas (CBOB) reported an 11.8% year-on-year growth in the average daily rate for entire place short-term listings, which reached USD 510.8. Total room nights sold between January and August this year grew by 7.8% against the comparable period in 2024.

Regionally, the October 2025 data from AirDNA showed the largest number of active short-term rental listings concentrated in the capital city of Nassau on the island of New Providence. Among the more active local submarkets (with 100 or more active listings), the highest average daily rates, exceeding USD 500, were reported in Hope Town, Exuma, Bimini, and Central Eleuthera districts. Occupancy for short-term rentals remains highly seasonal, fluctuating from 70-75% in March to 25-30% in September.

Key short-term rental indicators across selected submarkets as of October 2025:

The active growth dynamic in the STR segment of the market is generally welcomed by the local authorities, as the existing capacity of traditional hotels can not fully meet tourist demand, and an increase in the supply of private STRs has been supporting the rebound for the travel industry in the country after Hurricane Dorian and the pandemic.

At the same time, in an effort to maintain high standards of service across holiday accommodations and to ensure STR owners are meeting their tax obligations, the government launched a portal for those who own short-term rentals to register their businesses. The Department of Inland Revenue noted that all owners operating their properties as short-term vacation rentals are now required to register their properties, effective March 1, 2023. However, as of early 2025, only 20% of STR owners reportedly voluntarily registered their businesses and obtained necessary licenses, with many still operating outside of the jurisdiction. Moving forward, the Department of Inland Revenue (DIR) plans to take a more active stance and work with listing platforms to identify unregistered properties and enforce compliance.

Mortgage Market:

Interest Rates Stable, Early Signs of Recovery in New Lending

The average interest rate on residential mortgages in the Bahamian banking system gradually eased from the 8-9% levels in the 2000s and early 2010s and has stabilized in the last four years between 5.00% and 5.50%, with marginal month-to-month fluctuations. Most recently, it was reported by the CBOB at 5.32% in June 2025. The underlying CBOB key rates have remained unchanged since 2017 at 4.00% (bank rate) and 4.25% (prime rate).

The Bahamas's mortgage loan interest rates:

Data Source: Central Bank of The Bahamas.

Despite generally stable interest rates, average monthly payments on residential mortgages have increased by over 78% in the past twenty years, and reached BSD 2,046 (USD 2,046) in 2024. This rise, along with low mortgage approval rates (54.6% in H2 2024, according to the bank lending conditions survey published by the CBOB), a lack of supply of affordable housing options, and the duality of the property market split between the wealthy foreigners and the local population, continues to raise concerns about the accessibility of homeownership for the Bahamians.

The crucial challenge of loan payments growing faster than incomes was also highlighted by the IMF in the recent selected issues report on the Bahamas. "While employee compensation per capita has remained almost unchanged compared to 2012, average monthly payments on residential mortgages have increased more rapidly, despite the secular decline in average interest rates for residential mortgages over the same period," said the IMF.

Data Source: CBOB.

To address the issue of credit accessibility, the CBOB previously announced the relaxation of lending rules for residential mortgages at the end of 2023. Specifically, the mandatory requirement for mortgage indemnity insurance on mortgages secured with down payments of less than 15% was lifted. "While this is not anticipated to have a significant impact on personal lending, it should reduce the cost burden for suitably qualified borrowers and allow some additional individuals to qualify for credit," said the central bank.

In early 2024, the Office of the Prime Minister issued a press statement reiterating the administration's commitment to making homeownership more affordable and accessible for the people of The Bahamas and listing the main government measures to be supported and expanded further, including broader concessions to first-time homeowners and a new rent-to-own program for those who ordinarily would not be able to afford a mortgage or downpayment.

Against this background, lending activity in the Bahamas picked up somewhat last year, although new residential mortgage disbursements are still below the long-standing benchmark. In 2024, residential mortgage disbursements reported by the CBOB showed a solid 8.5% increase compared to the previous year, but remained 10.0% below the pre-pandemic peak level of 2018 and 14.4% below the 20-year average. The upward dynamic, however, appears to have carried into 2025, with a total of BSD 126.1 million (USD 126.1 million) of new residential mortgages disbursed in the first half of the year, which was 3.7% more than during the comparable period in 2024.

The total number and value of mortgage commitments have also shown a positive movement, although it was primarily driven by loans on existing dwellings and rehabilitation projects, while mortgage commitments for new buildings - a forward-looking indicator of domestic activity - remain subdued. In the first half of 2025, the CBOB reported a total of 534 commitments for BSD 126.1 million (USD 121.6 million). New construction loans represented only 10.6% of the committed value, compared to 67.3% in 2005.

"The loan approval rate certainly is not extremely high, so we're still seeing the banks remain very cautious in lending practices. I don't think that will change in the immediate future," Gowon Bowe, chief executive from Fidelity Bank, told The Tribune, pointing to the uncertainty over the outcome of the US tariff policy changes as one factor behind why the Bahamian banks are unlikely to change their stance. "There's optimism that we are still seeing the applications, and we are seeing new loans being disbursed. But the pace at which it is being disbursed is going to take a period of three to five years to return to 2019 credit levels," he added.

Data Source: CBOB.

The overall size of the residential lending market in The Bahamas has been shrinking over the past decade, following a period of rapid expansion and a subsequent brief stabilization in the early 2010s. The total value of outstanding residential mortgages annually declined by 1.1%, on average, between 2014 and 2024, and most recently stood at BSD 2.7 billion (USD 2.7 billion) in Q2 2025. Sized against the national economy, the mortgage stock dropped from an estimated 30.2% to only 17.2% of GDP at current prices in 2024. The vast majority of outstanding mortgages is maintained by the domestic banks (88.5%), with the remaining 11.5% of the stock held by insurance companies and other financial institutions.

Data Sources: CBOB, World Bank.

Socio-Economic Context:

Growth to Moderate Due to Capacity Constraints in Tourism

The Bahamian economy has undergone a remarkable recovery since the pandemic, fueled by a strong rebound in tourism. With economic activity now back to pre-Hurricane Dorian levels, growth is slowing (constrained in part by limited hotel capacity), with the real GDP growth moderating from 10.8% in 2022 to 2.6% in 2023 and 2.0% in 2024. Over the next few years, the IMF projects growth to slow further to the long-run potential rate of 1.5%, as capacity constraints in the tourism industry become binding.

In parallel, consumer price index (CPI) inflation for The Bahamas has dropped from a 5.6% peak in 2022 to just 0.4% in 2024 and continued to decelerate further, even fluctuating into negative territory, driven by lower transportation, household equipment, and recreation prices, as well as external factors such as a decline in fuel prices and lower US inflation. The latest report from the Department of Statistics, however, showed a low but positive inflation of 0.4% in May 2025, and the IMF forecast currently predicts the indicator will climb up to an annual level of 0.9% in 2025 and 1.3% in 2026.

Data Source: IMF.

The tourism industry remains the main driver of the Bahamian economy, demonstrating consistent, albeit structurally uneven, growth in the post-pandemic years. In 2024, the CBOB (based on the data from the Ministry of Tourism) reported over 11.2 million tourist arrivals, a 17.2% gain compared to the previous year. This substantial increase, however, was primarily driven by the cruise ship visitor segment (20.3% year-on-year), while the higher-spending stopover tourism arrivals registered a more moderate increase (3.6% year-on-year).

The diverging trajectories between two categories of visitors became even more apparent in the first half of 2025, when the country welcomed 1.05 million stopover tourists (-2.8% compared to the same period in 2024) and 5.28 million cruise passengers (+13.1% compared to the same period in 2024).

"Tourism output rose at a slower pace, as a result of more constrained activity in the high-value-added stopover segment, although the cruise sector earning growth remained buoyant," the CBOB commented in the latest economic review.

Consistent with long-term trends, the vast majority of stopover visitors (84.1%, according to the preliminary 2024 figures from the Ministry of Tourism) arrive in The Bahamas from the US; other leading geographies of origin include Canada (6.5%) and Europe (5.2%).

Data Sources: CBOB, Ministry of Tourism.

With the general recovery of the national economy, the Bahamian labor market saw overall improvement. Nationwide unemployment, which had previously skyrocketed to above 26% during the pandemic, decreased to 9.4% in 2024, the lowest level since 2008, according to the IMF data. The latest economic developments review from the CBOB shows an uptick in unemployment to 10.8% in Q1 2025 and notes that deterioration in the indicator is tied in part to a rise in the labor force participation rate. Despite being relatively high, current unemployment levels are below the national 30-year average for The Bahamas.

Data Source: IMF.

The overall economic prospects for The Bahamas are balanced, with risks tied to external tourism demand and domestic fiscal vulnerabilities. "Growth is expected to converge to its long-run potential <…> over the medium-term and risks to the outlook are balanced. Capacity constraints in the tourism sector are expected to become more binding, but there are upside risks from potential new hotel construction or a faster-than-anticipated expansion in the short-term rental market," summarized the IMF staff report.

In April 2025, Fitch Ratings assigned The Bahamas a 'BB-' IDR rating with a stable outlook, noting that the country's high GDP per capita and strong governance are offset by its low growth prospects, heavy reliance on tourism, and exposure to climate-related shocks.

Sources:

1. Central Bank of The Bahamas (CBOB)
   1. Foreign Exchange: https://www.centralbankbahamas.com/
   2. Money & Credit Aggregates: https://www.centralbankbahamas.com/
   3. Quarterly Statistical Digest, August 2025: https://www.centralbankbahamas.com/
   4. Quarterly Economic Review, June 2025: https://www.centralbankbahamas.com/
   5. Monthly Economic and Financial Developments, August 2025: https://www.centralbankbahamas.com/
   6. Bank Lending Conditions Survey Report, December 2024: https://www.centralbankbahamas.com/
   7. Relaxed Lending Rules for Residential Mortgages: https://www.centralbankbahamas.com/
2. Office of the Prime Minister
   1. Press Statement on the Davis Administration Expanding Opportunities for Homeownership for Bahamians: https://opm.gov.bs/
   2. 2024/2025 Budget Communication: https://opm.gov.bs/
3. Office of the Attorney General & Ministry of Legal Affairs
   1. Rent Control Act: https://laws.bahamas.gov.bs/
   2. Supplement Part I. Official Gazette The Bahamas: https://laws.bahamas.gov.bs/
4. The Bahamas Ministry of Tourism
   1. Stopover Visitors by Country & by Month, Islands of The Bahamas, Preliminary 2024: https://www.tourismtoday.com/
5. The Bahamas National Statistical Institute (BNSI)
   1. National Accounts: https://www.bnsi.stats.gov.bs/
   2. Consumer Price Index (CPI): https://www.bnsi.stats.gov.bs/
   3. Consumer Price Index Report, May 2025: https://www.bnsi.stats.gov.bs/
   4. Building Construction Stats Report Q2 2024: https://cdn.bahamas.gov.bs/
   5. 2022 Census Preliminary Results: https://cdn.bahamas.gov.bs/
   6. 2010 Census First Release Report: https://stats.gov.bs/
6. The Bahamas Department of Inland Revenue
   1. Government Launches Registration Portal for Short-Term Rentals: https://inlandrevenue.finance.gov.bs/
   2. Vacation Rental: https://inlandrevenue.finance.gov.bs/
7. International Trade Administration
   1. Bahamas - Country Commercial Guide: https://www.trade.gov/
8. International Monetary Fund (IMF)
   1. Country Overview: The Bahamas: https://www.imf.org/
   2. 2024 Article IV Staff Report: https://www.imf.org/
   3. Housing Affordability in The Bahamas: https://www.imf.org/
9. World Bank
   1. World Development Indicators: https://databank.worldbank.org/
10. PWC
    1. Worldwide Tax Summaries: The Bahamas (as of September 2025): https://taxsummaries.pwc.com/
11. Higgs & Johnson
    1. Conveyancing & Law of Property (Amendment) Act, 2025: https://higgsjohnson.com/
12. Savills
    1. Caribbean Islands. 2024/25: https://pdf.savills.com/
13. Knight Frank
    1. The Wealth Report 2025: https://content.knightfrank.com/
    2. Caribbean Residential Market Insight. 2025 Edition: https://content.knightfrank.com/
14. Graham Real Estate
    1. Q2 2025 Market Report: https://www.grahamrealestate.com/
    2. 2025 Mid-Year Market Snapshot: https://www.grahamrealestate.com/
15. MCR Bahamas
    1. Average Rental Price in The Bahamas: 2024 Guide: https://www.bettermcrbahamas.com/
16. AirDNA
    1. Short-Term Rental Markets: The Bahamas: https://app.airdna.co/
17. Fitch Ratings
    1. Fitch Assigns the Bahamas 'BB-' IDR; Outlook Stable: https://www.fitchratings.com/
18. The Tribune
    1. 'Unfulfilled dreams': Bahamians Face Five-Year Housing Disparity: https://www.tribune242.com/
    2. IMF: Property and Rental Rates Outpace Wages Growth: https://www.tribune242.com/
    3. Lending Stability 'Better Than Bubble Set to Burst'" https://www.tribune242.com/
    4. Just 20% Compliance by Short-Term Rentals: https://www.tribune242.com/
    5. Central Bank Ease 'Won't Open Mortgage Avenue': https://www.tribune242.com/
    6. Rent Control Ineffective for Protection of Tenants: https://www.tribune242.com/