With the exception of luxury homes, Bermuda’s property market is still in the doldrums, according to a new report.
The Coldwell Banker Bermuda Realty report reveals that property transactions fell by 75% over past five years – matched by a decline in prices.
Bermuda is suffering from the global economic turmoil but the top end property market has remained stable.
Those homes and apartments, costing more than £636,000, saw a slight rise in value in 2012 and sales are increasing too. They now make up one in five of properties sold.
Property owners in Bermuda saw prices rocket by 40% between 2003 and 2007, from £608,000 to £997,000.
Rents and prices plummet
However, following the global financial crisis, those homes fell in value to £809,000 within two years.
Rental values too are falling. Since 2007, rents have dropped by between 20% and 25%, which has been caused by increasing demand and not in the supply of homes.
The drop in rentals is illustrated by the fact that a luxury house which rented out for £2,500 in 2004 could fetch between £5,000 and £12,500 from prospective tenants in 2008. Since then, rents have slumped by nearly 20%.
In the last 60 years, Bermuda has seen strong economic growth and has one of the world’s highest GDP per capita incomes at £53,600 in 2011.
Success was fuelled by financial services and tourism with real estate contributing 17.4% of GDP.