Paradise Living in Bermuda
Like many visitors, chances are you’ve found yourself seduced by this unique slice of paradise and wondered how to turn a vacation here into something more. Buying a piece of Bermuda real estate — one of the world’s most rewarding property investments — is a natural next step. And thanks to new land policy changes and licencing fee reductions in recent years, buying into the Bermuda real estate dream is now more appealing than ever.
New Paths to Ownership
Bermuda has always placed importance on preserving a market share of the island’s houses for Bermudians, but changes to government land holding policies that were enacted in June 2012 have opened doors to more home ownership options for non-Bermudians. With the announcement that Bermudians are now allowed to sell their homes to non-Bermudians, there’s an undeniable buzz around the island. And the wider housing market has created a win-win situation for both buyers and sellers. With more houses now available to international buyers, your choice of where to place your foothold on the Bermudian dream lifestyle has never been more enticing.
Essentially, as long as the house for sale has an annual rental value (ARV) of at least $177,000, or at least $32,400 for a condo, Bermudians are now able to sell to non-Bermudians. The land policy was amended to allow non-Bermudian spouses of Bermudians the right to acquire land without the former requirement of an additional licence. Now that spousal alien licences are no longer required, non-Bermudian spouses can purchase their own home much more easily. This change in policy is estimated to have led to an additional 35 percent in whole ownership inventory in Bermuda available for purchase by non-Bermudians.
In 2013, exciting law changes to licencing fees brought even more good news for international buyers eyeing the island. As of April 1, 2013, the Bermudian government reduced licencing fees that non-Bermudian buyers are required to pay when purchasing a new house. Non-Bermudians used to have to pay a 25 percent fee, but now it’s a much lower 8 percent.
The reason the licencing fee is there is because of the limited availability of inventory available to foreign buyers, and with more inventory than ever when it comes to where non-Bermudians can own, the time to buy is definitely now.
Sallyann Smith, managing director for The Property Group Ltd., reinforces this claim. “In 2013, The Property Group had a very successful year, including the sale of three Ship’s Hill condominiums at the exclusive Tucker’s Point, all to non-Bermudians. With the recent sale of several major homes to non-Bermudians, we are confident that the Bermuda real estate market is gaining strength; and there continues to be tremendous interest in home sales and rentals.”
A Privileged and Affordable Niche
It’s fair to say that Bermuda ranks amongst the world’s most prestigious and pleasing places to live. Not quite English, certainly not American and far from Caribbean, Bermuda blends island style, cosmopolitan class and natural beauty.
The Reefs Club, adjacent to The Reefs Resort in Southampton; Tucker’s Point Club, in Tucker’s Town; and the Newstead Belmont Hills Golf Resort & Spa, located on Hamilton Harbour in Paget, are the three fractional-ownership residences on the island.
“The fractional-ownership option is particularly well suited for someone who plans to be on the island for only about a month a year,” says Buddy Rego, a long-standing island real estate expert and president of Rego Sotheby’s International Realty. Fractionals offer five weeks of guaranteed occupancy, plus the option for more. “In Bermuda, fractional ownership is the most affordable way to get involved in home ownership,” says Rego.
The Newstead Hotel and Belmont Hotel & Golf Course, once independent hotels, were purchased by local investors and joined to create one of Bermuda’s premier resorts.
“I think the idea of a golf resort paired with a waterfront resort and spa means that you have, in one property, the best that Bermuda has to offer,” says Bushara K. Bushara, general manager at Newstead Belmont Hills Golf Resort & Spa. “There is no other property like this in Bermuda. Due to the limited size of the island, we feel this opportunity to buy a centrally located second home, with both sea views and fairways, will not come to the market again.”
Remember, this is a lifestyle like no other you are buying into — and one for which you’ll be handsomely rewarded.
A Strong Economy
At just 21 miles long, Bermuda lacks open land for development. So what you have here, for the most part, are long-standing residential areas that have functioned as stable and nurturing communities for decades. Pair that with the overall success of Bermudian businesses — a thriving local economy, to be sure — and you have the groundwork for a healthy, flourishing society and an ideal place to invest in a stable future of your own.
Bermuda has the third-highest per-capita income in the world, and the moneyed populace enjoys world-class cultural opportunities, dining and recreational activities. Add to that Bermuda’s reputation as being safer than the Caribbean and the appeal is only enhanced for foreign buyers.
The list of people who have purchased here reads like a who’s who of business, politics and Hollywood, including billionaire H. Ross Perot, actors Michael Douglas and Catherine Zeta-Jones, and former New York City Mayor Michael Bloomberg.
Lifestyle lures aside, Bermuda’s healthy economy, paired with the weakened U.S. dollar and suffering housing market in the U.S. generates considerable interest from foreign investors looking to grab a share of the islands’ luxurious real estate.
Bermuda’s stable real estate market is proving to be a lure for more overseas buyers. Whilst the world has been plagued by a stormy market, Bermuda’s climate has remained relatively steady by comparison — especially when it comes to real estate at the upper end of the luxury market available for purchase by non-Bermudians.
When the North American housing market crashed, Bermuda properties fared much better, falling in value by only about 25 percent of what equivalent properties in the United States suffered. So it’s no surprise that buyers eyeing the upper end of homes here continue to show considerable interest.
Much of the buyer interest has come from the East Coast of the United States, Canada and the U.K. The U.S. buyer’s market, in particular, showed signs of rebounding in recent years, predominantly with American buyers in the luxury home segment, followed by British and Canadians in equal measure. Recent years have also shown an uptick in Europeans purchasing homes in Bermuda, whilst the condominium market has been dominated by keen buyers from Canada and South Africa as of late.
Overall, Bermuda real estate continues to be seen as a good value in the global luxury market because it hasn’t suffered the downward pressure that the U.S. market experienced. The fact that Bermuda’s currency is pegged to the U.S. dollar, still weakened against the Euro and pound sterling, makes the territory more appealing to Europeans, too. And whilst U.S. citizens are taxed on their worldwide income, U.K. citizens who domicile elsewhere are not subject to the same tax regulations as when they live in their home country — a further incentive for the British to call Bermuda home.
Another option for outsiders to buy into the Bermuda lifestyle, if even only for a period each year, is timeshare or vacation ownership. At the East End of the island overlooking the UNESCO World Heritage old town and its historic harbour is The St. George’s Club. Designated as one of the pillars of the new tourism focus, that end of the island is unspoiled. It is like stepping back in time with all the most modern amenities still there. Seventy-one fully contained Bermuda-style cottages are perched on Rose Hill, offering fabulous views. They are set in about 12 acres of naturally landscaped gardens. The facilities house pools, tennis courts and two very popular restaurants.
The St. George’s Club is a Bermudian-owned and -operated resort, and it offers members the right-to-use for up to six months for a period of up to 50 years. Unlike fractional ownership, timeshare does not bring with it the problems of owning real estate.
“Peak season is very popular, but there are a few weeks left in our inventory; and as our members age and their circumstances change, we do get requests to resell them for owners,” says Sally-Ann Kyle, president and general manager of The St. George’s Club. Rates do vary based on the time of year and start at as little as $5,000 for a week’s lease in a one-bedroom unit. Annual assessments range from about $1,350 to about $2,760 depending on the size of the unit and the time of year. Many of our members have been coming for more than 25 years and have memories of growing up on this island paradise in the middle of the Atlantic.
“Our option is less expensive than a hotel for a family who love coming to Bermuda every year. We are less than two hours from the East Coast of the U.S. and less than seven from London. The full kitchen option allows people to have the convenience of eating breakfast in their cottage, and our excellent restaurants offer lunch and dinner with menus and wines that cater to all tastes,” says Kyle.
The St. George’s Club offers excellent rates for someone wishing to have a “try before you buy” visit, subject to availability, of course.
Stake Your Claim
With such a variety of options for gaining a foothold in one of the world’s most desirable destinations to live, work and play, there’s a niche for every discerning home buyer with an eye on Bermuda. Deciding which pied-à-terre appeals to you most will be the hardest part. After that, you’ve gained a stake in Bermuda’s enviable and sophisticated mix of sun, sea and sand.
And being in on the real estate market, of course, lets you breathe easier, too, knowing you’ve invested in one of the most beautiful and desirable destinations on the planet.