Bahamas, The

Country Profile

As of 2013, The Bahamas had a recorded population of 377,000, with 83 percent of residents living in urban areas.¹ According to the country’s latest housing census recorded in 2010, nearly 60 percent of residents own their homes.²  Since the global financial crisis in 2008, many Bahamian homeowners have had trouble repaying their mortgages, and high delinquency rates have been an issue for the government mortgage lender, The Bahamas Mortgage Corporation, as well as the country’s commercial mortgage lenders.

In 1983 the Bahamian Parliament established The Bahamas Mortgage Corporation, which is overseen by the Minister of Housing and National Insurance and originates loans for individuals wishing to purchase, build or rehabilitate private housing. The corporation is authorized to issue bonds up to $120 million, guaranteed by the government. These bonds are linked to the Bahamian prime lending rate.³  Private commercial mortgage lenders are also prominent in The Bahamas; they generally offer rates near the Central Bank’s prime lending rate and are funded primarily by deposits and equity. While the country has eight commercial onshore banks, three dominate the commercial lending market, with 68 percent of all banks’ total assets. At year-end 2011, domestic residential mortgage loans made up 41 percent of all loans to private consumers by commercial banks.⁴

As of June 2013, nonperforming mortgages accounted for 58 percent of all outstanding nonperforming loans in The Bahamas. The IMF believes this number will continue to decline as many consumer banks have created flexible workout terms for underwater mortgages. The IMF predicts that due to the large amount of nonperforming mortgages, mortgage lending in The Bahamas will be stagnant in the near future as households continue to deleverage and banks adopt stricter lending requirements.⁵

Sources:

¹  WDI, The World Bank – The Bahamas.

²  Department of Statistics of The Bahamas.

³ The Central Bank of The Bahamas

⁴ The Bahamas:Financial Sector Stability Assessment,IMF2013

⁵ IMF, The Bahamas:2013 Article IV Consultation-Staff Report