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Assessment of 2nd Home Market Underway (Bahama Journal)
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Posted by:May 11th 2005, 10:08:33 am
Fig Tree News Team11th May
Assessment Of Second Home Market Underway

The government has made some headway in its intended evaluation of the second home market in The Bahamas, a sector that has generated many millions of dollars in revenue and fuelled various spin-off industries.

A committee is currently working on the assessment, according to the Minister of Financial Services and Investments Allyson Maynard Gibson.

The market has been branded a particularly burgeoning one in Abaco, the island that is the third strongest generator of economic activity in the country.

But there are no hard and fast figures to gauge the specific impact.

"In an island like Abaco where [the second home market] is certainly flourishing and obviously making a very strong impact generally in the community [they] may well have a different view of it than in islands like Mayaguana that has the potential for it or Crooked Island and even the Exumas," the minister said.

Real estate in The Bahamas is viewed as an especially hot commodity, particularly by foreign residents who are enamoured with what they perceive to be Paradise.

Investing as much as half a million dollars in a home here guarantees permanent residency status.

For others, the purchase of a second home is used as a tax break.

Paradise Island, near the exclusive Atlantis Resort, Grand Bahama, Exuma, Abaco and Eleuthera are prime locations, ranging from the dainty bungalows that line the waterfront to other lavish homesteads.

"We want to be sure that we fully understand, firstly, the market itself and its importance to The Bahamas and secondly, how various communities feel about the market," Mrs. Maynard Gibson said.

But in some situations, small hotel operators in the Family Islands have expressed concerns about second homes sometimes being rented out, posing direct competition with their businesses.

The government is pondering whether to make changes that would require certain government fees or taxes to be paid in that regard. It is also beginning to revise its entire land administration policy.

Prime Minister Perry Christie has conceded that the government has to be very meticulous in its planning of second homes.

He enthusiastically referred to the sector’s potential to help spur economic diversification.

"It is important to demonstrate to other islands of our commonwealth, where we have been making the call for Bahamians to become more involved in the economy of their country, not just to look through the window at the developers and those who benefit from them, but to become more involved as entrepreneurs, establishing linkages selling handicraft, souvenirs providing food stuffs…and making other items that could be used by the new developments, second home owners and hotels," he said at the time.

A year after the prime minister created the Ministry of Financial Services and Investments, which has the ministerial portfolio for second homes, the minister reported in a national address that the sector has flourished to the benefit of Bahamian realtors and contractors.

She disclosed that the confidence of investors in that regard was evident from the more than $280 million worth of applications made to the Investments Board between May 2, 2002 and April 15, 2003. It represented an 83 percent increase in land sales over the previous years.

Government officials have acknowledged that international landholding investments in second homes, vacation cottages and commercial ventures continue to foster economic growth and sustainable development in The Bahamas.

The President of the Bahamas Real Estate Association Pat Strachan has told the Bahama Journal that that Abaco has the strongest market for second home purchases.

The business has been so good for interests like Kerzner International that its 88 unit ultra luxury Ocean Club Residences on Paradise Island, geared toward high end clientele, was put on the market in January and by the middle of the month half of the units had been secured through deposits.

One of the units has an average cost of two and a half million dollars.

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