In 2005, ABIC financed a Bermuda Government review of housing on the island, commissioned by the government’s Sustainable Development Unit. This high-level study, completed last October, has now been released to the public, and is available on the ABIC website.
The report’s findings debunk some popularly-held beliefs about the availability and ownership of housing in Bermuda, but reinforces the fact that housing costs are eating further into the incomes of residents.
Some key surprises:
-There is no shortage of housing on the island. New housing stock stands at more than twice what the Government had believed would be needed at this point, and vacancy rates for rental housing have remained high — at 7%-10% — over the last 20 years.
While these factors normally would have a lowering effect on rents and house prices, this clearly is not happening. Average rents have increased by 40% since 2000, and the average house price has doubled.
-Rental subsidies are not common. Less than 10% of renting households receive subsidies, and these are as likely to be paid by government (to families in need) as by private companies. Just 42% of private company rental subsidies are paid out by international companies.
– Rising prices have not kept Bermudians from purchasing houses. The rate of home ownership by Bermudians was generally stable during the 1990’s at 51% -53%. Over the next five years, the average house price doubled, and Bermudian home ownership rose to 66% in 2005. A significant proportion of homeowners (25%) in 2005 also owned property that they rented to others.
Not so surprising:
-The amount of income Bermudians spend on housing has risen. The 2005 Government housing study found that on average Bermudian households that rent accommodation are spending 44% of income on housing.
While figures for home owners are not available, the ratio of average household income to average house price indicates that in general, Bermudians who own their own homes are paying large amounts of their income to support their housing. With the average house price in 2005 reaching $1,175,000 and the average household income at $106,233, the ratio is 11:1. By comparison, the ratio for the UK is about 7:1.
-The number of Bermudian households headed by females has risen significantly, as has the number of female homeowners.
In 1991, almost 2/3 of Bermudian households were headed by a man, but by 2000, over half (51%) were headed by a female. The home ownership rate by females rose from 43% in 1991 to 50% in 2000.
Attachments:
Housing Study
