‘Piece of the rock’? Every Bermudian understands that. Every Bermudian also understands that a ‘piece of the rock’ is very expensive.
According to Coldwell Banker JW Realty: “…the average price of a home was…$965,000…”. In a Bermuda Sun story a manager at the Bank of Bermuda: ‘…her bank would require a household to take in excess of $12,000 a month ($144,000 a year) in order to buy a million dollar home on a 30-year mortgage.’
In other economies, a household [at least two adults] will pay from two to five times its annual household income if it chooses to buy, instead of rent, its own housing. In our Bermuda, a two-adult household will need an annual income ranging from a LOW of $144,000 a year – buying at seven times annual income; to a high of $482,500 a year – buying at twice annual income. In our Bermuda, that’s what’s needed in order to buy ‘an average single family dwelling’.
Ridiculous? It is. But it’s a Bermuda reality.
The 2001 Census says that the median income for Bermudian households is $70,777. That means that exactly half the households in Bermuda have an annual household income that’s more than $70,777 a year – and the other households have a smaller income.
Obviously, then, half of all households in Bermuda cannot possibly buy ‘an average single family dwelling’. To do so, they’d have to spend more than thirteen times [that’s right!] their annual household income. OR, they’d have to get TWO more jobs – have four incomes – in order to double their household income to [$70,777 x 2 = $141,554] and even then still spend SEVEN times their total doubled annual household income.
So, no two income family here. Nope. This needs a four income family. Two adult persons, each working two jobs – and the kids packing groceries at the supermarket.
Family life? Kiss it goodbye! Children? The “village” will have to raise them! Community activity? When?
But there’s another side to our high prices. Every Bermudian who owns a ‘piece of the rock’ boasts of its value. You will not – absolutely NOT – find any Bermudian anywhere on this Island who’ll admit to living in a $100,000 dwelling.
The only place where Bermuda residents dwell in property worth less than $100,000 is in the graveyard. And graveyard plots are damn expensive!
The 2001 Census Report says that the median value placed on ‘a single family dwelling’ is $493,446. So a family earning the $70,777 ‘median’ income will have to spend SEVEN times that income to buy a ‘median’ priced dwelling.
Of Bermuda’s total of 9,764 owner-occupied dwelling units, 8,336 are said to be worth more than $350,000. Only 1,428 of all of Bermuda’s owner-occupied dwelling units are said to be worth under $350,000 – which is five times the annual (median) household income of $70,777.
What’s happening to those 1,428 units? Their owners are doing – or planning to do – all that they can to raise the value of their ‘piece of the rock’ to the highest level possible.
That’s the free market working with all its brutal efficiency. Everybody’s trying to get the highest possible price for his [or her] ‘piece of the rock’. The most common method of raising the price – the value – of a Bermuda dwelling? Add on!
By adding more bits to the house, the owner hopes to push up its value by one or two hundred thousand dollars. That way a shamefully low-value $350,000 single dwelling becomes a socially acceptable higher value $550,000 single dwelling.
That’s the real estate reality.
Yes, people do wail and gnash their teeth about a lack of affordable housing. These wailer’s are not homeowners. But once these wailers and gnashers can be converted into homeowners – they do exactly as I’ve just described.
A recent Royal Gazette story. A young couple managed to find a house for $365,000. What are they planning? Yup! Add on! So this $365,000 ‘find’ will become a $465,000 or $565,000 ‘value’.
Does Bermuda have a Housing problem? Perhaps not. The reality? Bermuda may have a ‘free market economy’ problem. In this ‘free market economy’, everybody really desires a $500,000 ‘piece of the rock’ and nobody – absolutely NOBODY – wants a simple $100,000 ‘affordable’ single family dwelling?
If any Bermudian family or household manages to get its hands on a $100,000 single family dwelling – they’ll add on anything to take its value up as high and as fast as they can.
Isn’t that the real Bermuda? Really?