NASSAU, Bahamas — President of Arawak Homes Franon Wilson said yesterday that the commercial banks’ adverse position on mortgages for new builds means that more Bahamians will have to look for turnkey solutions in order to afford a new home, The Nassau Guardian reported on Tuesday, September 6, in an article written by Chester Robards.
Wilson said banks have begun to become more liberal with lending now that the COVID-19 pandemic has abated and hotel workers and those in the tourism sector have gotten back to work. However, he pointed to a Guardian Business article from last week that explained that banks are hesitant to lend money for new construction, given the increase to their risk profile.
Last week, Bank of The Bahamas Managing Director Kenrick Brathwaite told this paper that some local banks are completely averse to the risks associated with construction loans and will not approve them, adding that with high inflation in the markets, there has to be even more vigilance on the part of the banks.
Brathwaite said banks are more interested in turnkey mortgages than financing the construction of a new home.
“Few banks now are giving mortgages to build,” said Brathwaite.
“Most of them just want turnkey operations anyway. They don’t want the risk associated with building because you have to manage the project, manage money, manage workmanship.
“There are too many things you have to manage once you give a loan for a construction job.
“Banks have always been doing that outright. Now there are some banks in this country that do not give mortgages for construction because there are a lot of risks built into the construction job.”
Brathwaite was responding to questions about how mortgagees and contractors have fared in the midst of high inflation and the soaring costs of some construction material.
Wilson also lamented the increase in the cost of building supplies and the inconveniences that have come along with that. See complete article in The Nassau Guardian at https://thenassauguardian.com/more-bahamians-will-have-to-look-to-turnkey-homes-says-arawak-homes-president/
