Bahamas Real Estate Attracting Growing Interest From Foreign Investors
As the Bahamas real estate market starts to recover from the global recession, there are many factors making the market attractive. With high yields on rental properties, tourist arrival rates climbing, expansion of the country’s infrastructure underway, no restrictions on foreign buyers, and no income, sales or estate taxes, there are many advantages for foreign investors looking to buy real estate in the Bahamas. See the following article from Global Property Guide for more on this.
The Bahamas property market is gradually recovering from the effects of the global recession as US and UK buyers return to the islands. There is a considerable amount of development in the second-home market as investment interest from Latin American and Asian buyers also increases.
The Bahamas does not release official house price figures, but the average price of a luxury home is about US$1 million. Condominium and apartment units range from US$300,000 to US$100,000, depending on the location. In the Bahamas, it’s not uncommon for wealthy buyers to go for properties that cost as much as US$14 million.
The Bahamas has enjoyed stable economic growth , with an average annual GDP growth rate of 3% between 1997 and 2007. However, due to sharp declines in tourism and financial sectors in 2008, GDP growth was estimated to have slowed to 1%. In 2009, GDP declined by 3.9%.
A low rate of growth of 2% is anticipated from 2010 to 2011 as tourism receipts by air and sea improve due to increase in air services and cruise operations.
Tourism-related construction projects led by the government are also expected to encourage development plans for real estate projects and attract more foreign investments.
Tourism and construction
Tourism and tourist-driven construction remain the backbone of the Bahamas’ economy, accounting for approximately 60% of its GDP and employing more than 40% of the total workforce. Offshore finance, the second largest industry, accounts for around 15% of GDP.
A construction boom in the private sector (hotels, resorts, and residences) began in 2006 due to a steady flow of tourist arrivals and increased foreign investments, which resulted to a solid GDP growth. As the recession deepened, the tourism industry saw a significant decline in visitor arrivals and occupancy. The country’s GDP declined by 2.4% in 2009, from 1.5% in 2008.
During the first quarter of 2010, there was a slow but steady increase in tourist arrivals, which recovered by 9.2% to 1.4 million from a 2.9% decline in 2009, according to the Central Bank of the Bahamas (CBOB). Stopover arrivals improved in Grand Bahama (up by 14.9%) and New Providence (up by 16.9%), where new cruise ships are operating. This, however, meant that passenger delivery to the Family Islands in the southeastern part of the Bahamas, once the first port of entry, declined by 4.8%.
In 2009, there was an estimated 3.5 million tourist arrivals in the country, dominated by Americans and Europeans. To stimulate economic activity and boost the real estate market, the government approved the plans for a new harbor for larger cruise ships are under way. This will transform a run-down, industrial part of Nassau, New Providence and can spur the development of more residential and construction projects in the area.
Construction of several government infrastructure and facilities projects is also either completed or ongoing. These projects include:
- The US$275 Phase I redevelopment of Lynden Pindling International Airport – new US Departure Terminal to open in 2011
- The US$130 million New Providence Road Enhancement Project, (part of the US$1 billion infrastructure program to be invested over the next five years) – new road corridors completed in June, 2010
- The road networks in the Family Islands: Abaco, Acklins, Current and Current Island, Eleuthera, Harbour Island, and Ragged Island
- And two new ports, in North Abaco and Exuma, respectively