Beyond beaches: why the Bahamas property market is a prime investment haven

Nestled amidst the crystal-clear waters of the West Indies, in the North Atlantic, the Bahamas displays all the picturesque qualities attributed to the region and continues to cast its spell on all visitors. Beyond the swaying palm trees and pristine beaches, the Bahamas offers unique opportunities for property buyers and investors.

It’s why we recently expanded our presence in this tropical paradise with a new affiliate office led by Edward de Mallet Morgan, a Partner and global and regional expert in Knight Frank's International Residential team.

To guide you through the intricacies of this thriving market, Morgan discusses the current state of the local property market, emerging trends and shares expert advice for those looking to invest in a slice of paradise.

Why does the appeal of the Bahamas continue to endure for tourists, property buyers and investors?

Before you even land in the Bahamas, you see the aquamarine waters from the air and know you are visiting one of the most naturally beautiful island regions on earth. Glamourised and regularly used as a backdrop in the film industry, the Bahamas, for many, conjures up a dreamy cocktail of the adventures of James Bond and Pirates of the Caribbean. Indeed, Sir Sean Connery and Johnny Depp have famously owned property in the Bahamas, along with many other globally recognised entrepreneurs, titans of industry, celebrities and sports stars. The captivating blend of nature and exceptional real estate attracts both visitors and those who want to make the Bahamas home.

Throughout the more than 700 islands and cays making up the archipelago of the Bahamas, each island has its own natural and commercial makeup and personality. On the main island of New Providence, featuring the capital, Nassau and Paradise Island connected by a bridge, there’s a mixture of exceptional five-star beachfront hotels, casinos and secure, established gated resorts of Lyford Cay, Old Fort Bay, Albany and Ocean Club. This mix provides a range of first-class condos, oceanfront homes, super yacht marinas, and golf course-facing residences. All are either on or just moments from the ocean.

Luxurious three-bedroom beachfront villa on Paradise Island, Nassau. Guide price: $7,250,000

What is the current state of play in the Bahamas property market?

The real estate market in the Bahamas offers a great deal as a safe haven in an established location in which to live and invest. The market is well regulated and easy to navigate, with the added rarer property types of both private island resorts and individual ‘private islands’ themselves, which the Bahamas has more of than most other island regions. Accessibility to the East Coast of America is a key benefit. During Covid, people sought health, privacy and locations providing better lifestyle benefits. Post-Covid, the realisation that one can live and work in the Bahamas, combined with its tax haven financial status, continues to draw more people to the region.

The proximity to Florida, in particular, and the movement of high-net-worth individuals from within the US to Florida for its low tax rates has further enhanced the region's appeal as not only a place to live full time but as an ideal place to own a weekend and beach holiday home. It's similar to the connection between The Hamptons and New York City. There are numerous flights daily between the US and the Bahamas, and such is the popularity of the route that Delta have recently announced daily flights from Miami. Nassau is about an hour from Miami by plane, three-and-a-half hours from New York and a nine-hour flight from London – all direct. With such easy accessibility and increasing demand, pricing in the Bahamas remains strong and indeed is strengthening, recently evidenced by a record-high sale in Lyford Cay.

Little Whale Cay, the closest developed private island to Nassau, extending to 40 acres. Guide price: $29,000,000

What unique opportunities does the Bahamas property market present for investors?

Such is the interest and increasing demand for the Bahamas that there are several new developments planned and in construction, including apartment/condo projects, island resorts and luxury hotels, with several global brands entering the region for the first time. This investment provides good off-plan buying opportunities and investments, as both principal homes or holiday homes. There is also no capital gains tax on real estate investments.

Are there specific areas or styles of property that buyers should pay special attention to?

The community is key: where its located, how accessible the community and island are, and what amenities are available. Then, one must ensure that homes have been well built - particularly important given the regularity of extreme weather in the region. In terms of the main gated communities themselves, they all have slightly different characteristics; some are more social, others less so, some have more people living full time, and others have a higher proportion of purely holiday homes with more of a ‘resort’ feel. It's important to consider which of these has all that you are looking for in a holiday or permanent home.

When it comes to style of property, for me, the Bahamas is about having all the luxury and convenience of any home, be it in London or New York, tailored for the climate and inside/outside beach and island living.

What are some key cultural and regulatory considerations buyers should be aware of?

Bahamas Real Estate operates under British Real Estate law as a member of the British Commonwealth, providing a well-established system for evidencing title and a clear buying process. No residency restrictions exist for buying and owning property in the Bahamas.

How do you see the Bahamas property market evolving in the coming years?

The Bahamas, like many tax haven locations, benefits when there is global political, fiscal or security instability as we have today. People want safe haven locations to live and spend time in, especially families. Post-Covid, with an increased focus on health, wellness, lifestyle and personal and financial security, more and more people are expected to move and buy property in locations like the Bahamas. As already mentioned, the strength and proximity of the real estate market in Florida is a key indicator.

What would you buy if you were looking for a property investment in the Bahamas?

Most people looking at buying in the Bahamas or the wider Caribbean region want to be in a safe and beautiful environment, ideally on a gorgeous beach. I would look for a beachfront property in one of the key gated communities around Nassau, which has been well-built and benefits from modern communal amenities and facilities for both grownups and families. Prices continue to increase in most of these resorts, so overall, they all represent a good investment.

If I had the time or was looking at a longer-term investment, I might buy an older property and rebuild it to my own more exacting and particular personal and family requirements. Alternatively, I might buy a property in one of the new private island hotels and resorts, where properties are selling quickly off-plan and, where managed by a top hotel brand, will also likely return a strong rental yield to cover running costs.

For any enquiries about the Bahamas, please contact edward.demalletmorgan@knightfrank.com. Explore more properties for sale in the Bahamas.