Construction Sector In A ‘Dismal Situation’

THE Bahamas’ construction sector appears to be in a “dismal situation” according to one local contractor, charging that “prohibitively expensive” closing costs have caused the demand for new home construction to dwindle significantly. Stating that, “It’s not a rosy picture at all” Stephen Wrinkle, immediate past president of the Bahamian Contractor’s Association (BCA) noted that banks were sitting on “tons of inventory they can’t do anything with” and the average Bahamian is finding it increasingly difficult to obtain credit. “The construction industry is in a dismal situation right now, with closing costs so prohibitively expensive, the demand for new homes construction and purchases has dwindled. Unless and until government starts to think about incentive versus tax, I don’t think we’re going to see any growth in this industry at all,” said Mr Wrinkle. “Most contractors are seriously considering down-sizing because the carrying cost of a company are just prohibitive. It’s not a rosy picture at all. The banks are sitting on tones of inventory they can’t do anything with; they can’t foreclose and resell them because there is nope qualifying for the loans. “New home construction is suffering because of that. Customers are having so much difficulty obtaining credit that for the average Bahamian it’s next to impossible to afford to buy or build a home today. The Bahamian dream of home ownership is out of reach for most Bahamians today. I think that clearly defeats the intent or goal of any administration in this country,” said Mr Wrinkle. Mr Wrinkle said that there is nothing to indicate that the market is going to rebound, particularly the housing sector. “The corporate business is nil. Everyone is in a holding pattern and will be for the next several months. Very few people are going to do anything in terms of expansion until this thing shakes out with value added tax,” he said. “The development perspectives are at a standstill for private developers to the local market. Even some of the major players have substantially reduced their schedules for build outs. We’re in a dire situation. We continue to look at alternative construction methods, cost saving techniques and time saving approaches to building a more efficient home but every time we seem to find a way to turn the corner another tax comes on us and we have to pass it on. At the end of the day, it’s self defeating,” he said….