Are you a keen observer of Bermuda’s real estate market? If so, you might have noticed that quarterly and annual reviews by real estate companies (typically in the form of self-promoting press releases in The Royal Gazette) have been less prevalent over the last two years. One reason for this is that the Bermuda Government’s new Land Title & Registration Office — with its promised online public access to sales data — has yet to fully find its sea legs. Add to this the fact that the former paper file system … where sales were recorded in the Government’s Land Transfer office … transaction by transaction, page by page, parish by parish … is no longer maintained for public review. What happens in the meantime? Savvy agents keep a close ear to the ground and maintain their own records based on inside market knowledge … and occasional ( and greatly appreciated) updates from the Land Registrar.
In previous blog posts, I have noted that the number of Non-Bermudian Category house sales typically averages between six and nine completed sales per year. By my best calculations at this date, 2019 has performed easily at the high-end of ‘average’. However, the number of completed sales actually says more about how quickly (or not) the Bermuda Government’s Dept. of Immigration works through the approval of Non-Bermudian purchaser license applications than it does about actual sales activity in the luxury market.
While the number of completed sales remains ‘average’ based on a 25-year analysis, current luxury market activity is significantly up. Sinclair Realty | Christie’s is aware of at least 14 such transactions at varying stages of contract and completion in the Non-Bermudian category (and there may be more). To put this in perspective — because completion of higher-end sales can take three to six months (and sometimes much longer more if there are any legal complexity), 2020 is already set to perform at least as ‘average’, and it is not yet January 1st.
Of the 14 Non-Bermudian Category house sale transactions in 2019, here are some points of analysis …
- Sinclair Realty | Christie’s continues as the luxury house market leader. With just two licensed sales agents supported by the strength of the Christie’s global brand, John & Karin Sinclair are responsible for over 40% of the sales in this sector, which is triple our nearest competitor and more than double the performance of Bermuda’s five largest real estate companies combined (a total of 82 agents).
- 70% of sales were under $4.5 million. This is unsurprising given the Bermuda Government’s lowering in 2015 of the ARV threshold, which determines if a house is eligible to be sold to an international purchaser. There are simply more houses eligible in the entry level of the Non-Bermudian Category than in previous years.
- Uptick in the $10 million – $35 million sector . While these sales will not complete in 2019, the New Year looks promising. Some readers may interpret this bullet point as irrelevant to their own lives and property aspirations; however, this uptick is positive news for Bermudians at all levels of the market. ”The fish rots from the head first’ is an old adage; but we sometimes overlook the fact that these large estate purchases at the top of the market are made by individuals who in turn bolster demand for services and products supplied by Bermudians. They also generate direct revenue for Bermuda ( the Non-Bermudian license fee is calculated as 8% of each Non-Bermudian house purchase, Bermuda Government stamp duties apply to every sale transactions, plus Non-Bermudian category properties attract a premium annual land tax calculated at the highest band). So that very same fish head is capable of improving the health of the Bermuda economy.
- Of the 2019 Non-Bermudian Category house buyers , approximately 57% are actually Non-Bermudians, 21% are Bermudians, 14% are British Overseas Territory Citizens & 7% are Permanent Residency Certificate holders.
- Most of the 2019 Non-Bermudian purchasers are from North American and non-EU countries. Again, that is unsurprising given the uncertainties in the UK and EU. But based on offers and acceptances currently in play, we are highly likely to see those demographics shift in 2020.
- More than 80% of all luxury house sales in Bermuda involved boutique real estate companies (’boutique’ being defined as an agency with four or fewer licensed sales agents). This is an interesting fact. The larger agencies that might give the appearance of market domination are actually not the meaningful producers in this specialised market sector …. here, a reminder that Perception is not always Reality.
So, as the New Year approaches, Sinclair Realty celebrates and congratulates the work of Bermuda’s boutique real estate companies. John and I wish all our colleagues, clients and friends a productive, healthy, happy and successful 2020.
With warm regards from our home to yours — Karin H. Sinclair