One thing I really don’t get is the lack of attention to not only "affordable housing" in terms of Bermudians being able to own their own homes, but also in terms of "affordable rentals".

As a young Bermudian, looking at the real estate section of e-moo is depressing.  $2700 for a one bedroom apartment in Sandys, $2500 for one in smiths, or if really lucky, you can get a $2300 one in St. Georges.  Comparing the 5 available apartments to the list of 20+ who are looking for apartments is even worse.  Unfortunately, demand heavily outstretches supply, it has for some time now.

In all reality, even with a 100% mortgage it is very difficult for young Bermudians to consider purchasing one of the ‘affordable homes’ that government is working on, assuming you could be lucky enough to get on the list for one.  It just isn’t realistic.

Even a $500,000 mortgage at 7% interest over 30 years amounts to over $3,300 a month in payments.  Even a home at $750,000, half the price of the average home is almost $5,000 a month.  On top of that, if you take a 100% loan your taking on the equity risk meaning that if Bermuda’s housing market takes a downturn and your $750,000 house is suddenly worth $500,000, if you want to sell it you’re going to have to come up with the $250,000 difference.  Thats a heavy gamble that I don’t think too many people taking on these 100% mortgages consider.

Taking a range of yearly incomes for youthof $30,000, $50,000 and $70,000 respectively, after removing deductions (payroll tax, pension, social insurance, health etc), that comparatively leaves $2,500, $4,166, and $5,833 in terms of monthly income.

When a one bedroom apartment costs $2000+ a month, it simply isn’t possible for anyone on a $30,000 wage to afford.  On $50,000 its a struggle, but you could live, and on $70,000 you could manage to save some.  Trying to cover a $3,300 a month mortgage would be near impossible for those making $30,000-$50,000.

Now, of course, our elders proclaim that youth today are just lazy and unwilling to sacrafice.  That with two decent incomes you can make it.  The big problem is it isn’t easy to just meet someone who’s also making a good enough wage to make this kind of budget reasonable.  What concerns me even more is that our government is set on removing the used car market as a solution to our traffic woes.  I’ll offer this prediction right now that it won’t do anything but hurt those in the low income brackets and those doing their best to save as much as they can.

In my own scenario, I live in St. Davids.  This can be a difficult place to live in terms of public transport because the buses stop running shortly after 6 in the evening.  Considering I work until 5:30, it is impossible for me to take the ferry and very difficult for me to make the St. Davids bus transition.  On top of this, I am an unwilling conscript of the Bermuda Regiment which keeps me in Warwick until 9-11pm each Thursday evening.  Transport at this time is very difficult if you don’t have a bike or car.

As such, I was very thankful for our used car market when I found the opportunity to purchase a car for cheaper then the cost of most bikes.  It certainly isn’t anything fancy and can barely do more then go from A to B, but really, if I expect to afford any kind of future in Bermuda, fancy cars likely will never be a luxury I can afford.  I have little idea how long my car will last and I am very much against the proposed elimination of the used car market as it will force me to either give up owning a car or increase my monthly expenses to cover a loan on something brand new.

With the prospects of how costly homes are it is getting to the point where I’m simply accepting that for many Bermudian youth, we won’t have a future here.  By comparison, when you can get a home abroad for $200,000 and you’re well educated, it is more worth your while to save all you can and aim for a future off island.

So, while our Premier is planning to visit students studying abroad in order to convince them to return to Bermuda as an attempt to reduce the brain drain of what few well educated youth we do have, I hope he’ll consider dedicating time to solving not only the affordable housing crisis, but also the affordable rental crisis. 

I am doubtful that many of those living abroad who have worked hard to attain a good education will like the prospects of living with their parents and on the absolute cheap until they’re 40 just so they might have a shot at saving enough money to make Bermuda a realistic long term option.  Especially when those who are better educated have alternatives available off island.