There has been a more than 50 per cent drop in the number of companies and individuals enquiring about real estate purchase or rental, while existing renters are seeking to negotiate new terms with real estate operators, as the COVID-19 pandemic continues to take a bite out of their income.
President of the Barbados Estate Agents and Valuers Association Inc. (BEAVA) Susan Armfield told Barbados TODAY that there has been an overall decline in the local real estate market, with at least 25 per cent of the pre-COVID transactions being placed on hold.
“I would say there has been probably a 25 to 30 per cent fall off in that some people have either retracted or agreed bilaterally to put the transaction on hold,” she said.
She explained that while there were “agreements in principle” between some real estate operators and potential buyers to sign documents and do a down payment of ten per cent, they have mutually agreed to wait out the pandemic.
“There has been quite a bit of that. In other words, bilateral cooperation in allowing those parties to maintain their agreement in principle but delay the commitment to paying deposits and finalising,” said Armfield.
She said it was still too early to say what was the full impact on the sector as a result of the COVID-19 pandemic, but said based on initial estimates, enquiries for rental or purchase of a property in Barbados have declined by more than 50 per cent.
Armfield also reported that some business and residential tenants have been trying to negotiate cheaper rents as they try to come to terms with dwindling revenues.
“It is kind of emerging. I wouldn’t say that anybody knows exactly what the degree of impact is, but we can say that we have already been contacted by people who are renting, who are looking to negotiate a lower level of rent, people who are looking to move, to substantially reduce their rental costs. Our level of enquiries I would say has probably dropped off by at least 60 per cent,” she explained.
There are in excess of 100 registered real estate operators in Barbados including some one-man operations.
The real estate broker told Barbados TODAY some of the larger companies have been reaching out to full time staff members to take a reduction in salaries and commissions in order to preserve as many jobs as possible in the industry.
“They have also taken a position to offer staff to take holiday now so that when hopefully in a few weeks’ time we are up and running, companies won’t then have to pay holiday. Most of the people have been cooperative,” she said, adding that there were several companies with contract workers who they have also been appealing to in order to help preserve jobs.
“There is definitely contraction in the market and a lot of difficulty, but people are generally being cooperative and are willing to work towards making the best of a bad situation, which is really terrific and very encouraging.”
Armfield said one promising sign was the fact that there were still local and overseas buyers who were pushing ahead with transactions.
“There is a sector, particularly the UK market, who are impressed by the way we are coping with the outbreak and have confidence that we are going to come out the other side in good shape,” said Armfield.
“There are also some local people who were in the process of arranging to buy, who have just decided to go ahead with that,” she added.
One real estate operator who has been in the market for close to a decade, told Barbados TODAY he was concerned that things could go further south if the pandemic drags on for several more months.
Speaking under condition of anonymity, he reiterated that in addition to a dramatic slowdown in new property sales and rentals, several businesses that were renting have started to negotiate for an ease.
“A lot of the businesses that use rental space are not opened because of the curfew. So they no longer have the kind of revenue coming in that they were getting before the COVID-19 pandemic. A number of those companies have also let go staff because they are trying to remain in business,” he said
“It is not just the real estate industry that is impacted. This pandemic has thrown a spoke in the wheel for every sector. So you have to understand that we are depending on company ‘A’ for example, to bring in income so they can in turn pay their rent. It is difficult,” he said.