## Housing Affordability in The Bahamas

## Source details

**Canonical URL:** [Housing Affordability in The Bahamas](https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025032.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025032.pdf.md)
- [Structured JSON version](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025032.pdf.json)

---

### A. Background
- Population trends:
  - Population expanded by 13 percent between 2010 and 2022.
  - New Providence population growth: 20 percent between 2010 and 2022.
  - Other island growth: Acklins 20 percent; Berry Islands 24 percent; Bimini 19 percent.
  - New Providence average household size increased from 3.5 to 3.7 persons between 2010 and 2022.
  - Increases most prominent in coastal districts Fort Charlotte and Freetown, and neighborhoods Englerston and Bain & Grants Town.
- Drivers of New Providence population change:
  - Natural increase, net positive migration to The Bahamas, and migration of some Bahamians from Abaco and Grand Bahama after Hurricane Dorian in 2019.
- Household composition:
  - Average household size remained relatively unchanged nationally since the last census.

### B. Challenges — Housing Supply, Affordability, and Financing
- Housing supply trends:
  - A 2000 assessment recommended adding 2,378 units annually between 2000 and 2011 to meet future housing demands.
  - Residential construction completions peaked at 1,705 in 2006 and contracted to 607 completions in 2023.
- Affordability and wage dynamics:
  - Between 2012 and 2022, the implied price of Real Estate, Owner Occupied and Actual Rents activities increased by 14 percent.
  - Employee compensation per capita increased by 2 percent between 2012 and 2022.
  - Vulnerable groups: 58 percent of the poor live in privately-rented housing subject to annual rental rate changes, compared to 34 percent across the country.
- Financing constraints and mortgage market:
  - New residential mortgage commitments for single dwellings and duplex and row dwellings have trended downward since 2008.
  - Average monthly payments on residential mortgages have increased more rapidly than employee compensation per capita, despite a secular decline in average interest rates for residential mortgages over the same period.
  - Mortgage application approval rate in H1 2024: 54.3 percent (lowest approval rate of all credit categories).
  - Main reasons for mortgage denials: low credit scores; constraints on banks’ lending outside of internal policy; underemployment; prior delinquency history; higher debt service ratios; insufficient working history in the current job; inability to verify income; inadequate funds for a down payment.
- Short-term rental market dynamics:
  - Short-term rental listings: 4,076 in January 2018; 7,265 as of August 2024.
  - Growth strongest for properties classified as apartments, condos, or lofts—the number of listings more than doubled between 2018 and 2024.
  - Short-term rental stock accounted for less than 5 of the total stock of dwelling units in The Bahamas at the end of 2022.
  - Average daily rate on short-term rentals rose 30 percent between 2018 and 2023.
  - Implied price of Real Estate, Owner Occupied and Actual Rents activities rose 2 percent between 2018 and 2023.
  - Hotel room capacity declined by 9 percent between 2018 and 2023; short-term rentals helped offset this decline and supported the rebound in stay-over arrivals post-Hurricane Dorian and the pandemic.
  - Average short-term daily rates vary widely across islands, with particularly high prices in the Exumas.

### C. Policy Options and Current Initiatives
- Current government programs and measures:
  - Department of Housing administers the Guaranteed Loan Programme with financial institutions to provide affordable housing to low- and middle-income families.
  - Bahamas Mortgage Corporation (BMC) is a primary user of the Guaranteed Loan Programme for homes costing up to $250,000.
  - As of September 2024, 11 percent of outstanding residential mortgages for existing structures were held by the BMC.
  - Government measures to support rebuilding and housing: removal of duty on building materials for Family Islands after natural disasters; construction of public rental units and senior citizen units nationwide.
- Public spending on housing:
  - Central government spending on housing and community amenities: 0.02 percent of GDP in 2021 (down from 0.11 percent of GDP in 2008).
  - Regional peers’ average: 1.3 percent of GDP on housing and community amenities.
- Policy recommendations and considerations:
  - Increase public spending on affordable public housing to address rising demand, especially in New Providence due to increasing population density.
  - Incentivize private investment combined with additional public investment in affordable housing to alleviate shortages in Grand Bahama and the Family Islands, particularly where prior natural disasters exacerbated shortages.
  - Exercise caution that initiatives encouraging growth in short-term rentals do not inadvertently crowd out investments in residential housing.
  - Ease access to credit for residents to support increased homeownership.

*Prepared by Maria Alexandra Castellanos, Beatriz Garcia-Nunes, Shane Lowe, and Vu Thanh Chau. SIP/2025/032. December 17, 2024.*

---


_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025032.pdf_