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Mario Carey: Foreign bank uncertainty drives real estate value

Thu, Mar 23rd 2023, 10:10 AM
Business Finance

The sudden collapse of two banks in the U.S. followed by jitters over a major European financial institution last week sent shockwaves throughout the business world, sending a clear message about the value of land, says a leading businessman. 

“The failure of Silicon Valley Bank in California and Signature Bank in New York have upset markets around the globe, unnerved consumer confidence and undermined a belief in too big to fail,” said Mario Carey, a voice for innovation in business, investment and philanthropy.  

Carey notes that while these were one-off incidents, they left depositors and investors shaken. 

“A bank run that barrels along like tumbleweed gaining momentum can destroy what has taken decades to build,” said the founder and chairman of Better Homes and Gardens MCR Bahamas. 

Land, on the other hand, he says, will always be there. And in The Bahamas where demand outpaces supply, appreciation in value has been a constant in New Providence and increasingly so in recent years in the Family Islands.  

“I will never forget the first four words I heard in my first appraisal course when I was studying real estate in college,” said Carey, who has gone on to handle more than $2 billion in transactions. “Under all is land.”

“So here we have two banks that were shaken to their roots, Signature Bank in New York, which was the third largest bank failure in history, and Silicon Valley Bank which many believed was the heart of the Silicon Valley tech industry with $200 billion in assets. And in no time as shareholders or executives started selling off shares, they were crumbling like a sand sculpture too close to the water’s edge at incoming tide.” 

Yet, in the same time frame, local properties ranging from small lots in middle income neighbourhoods to luxury residences in exclusive gated communities were selling at top dollar, attracting the highest prices ever asked, and in some cases attracting offers only hours after being listed, said the real estate pioneer. 

“I have no doubt that our local banks are well shored up and safe, but we learned a lot from the FTX bubble and from what is happening in other parts of the world in banking, particularly with currencies that are volatile or vulnerable to political instability,” he said. “With the exception of threats from climate change, land will always be there -- solid, permanent, real. The strongest ‘currency’ of all is the earth you stand on.”  

 

The sudden collapse of two banks in the U.S. followed by jitters over a major European financial institution last week sent shockwaves throughout the business world, sending a clear message about the value of land, says a leading businessman. 
“The failure of Silicon Valley Bank in California and Signature Bank in New York have upset markets around the globe, unnerved consumer confidence and undermined a belief in too big to fail,” said Mario Carey, a voice for innovation in business, investment and philanthropy.  
Carey notes that while these were one-off incidents, they left depositors and investors shaken. 
“A bank run that barrels along like tumbleweed gaining momentum can destroy what has taken decades to build,” said the founder and chairman of Better Homes and Gardens MCR Bahamas. 
Land, on the other hand, he says, will always be there. And in The Bahamas where demand outpaces supply, appreciation in value has been a constant in New Providence and increasingly so in recent years in the Family Islands.  
“I will never forget the first four words I heard in my first appraisal course when I was studying real estate in college,” said Carey, who has gone on to handle more than $2 billion in transactions. “Under all is land.”
“So here we have two banks that were shaken to their roots, Signature Bank in New York, which was the third largest bank failure in history, and Silicon Valley Bank which many believed was the heart of the Silicon Valley tech industry with $200 billion in assets. And in no time as shareholders or executives started selling off shares, they were crumbling like a sand sculpture too close to the water’s edge at incoming tide.” 
Yet, in the same time frame, local properties ranging from small lots in middle income neighbourhoods to luxury residences in exclusive gated communities were selling at top dollar, attracting the highest prices ever asked, and in some cases attracting offers only hours after being listed, said the real estate pioneer. 
“I have no doubt that our local banks are well shored up and safe, but we learned a lot from the FTX bubble and from what is happening in other parts of the world in banking, particularly with currencies that are volatile or vulnerable to political instability,” he said. “With the exception of threats from climate change, land will always be there -- solid, permanent, real. The strongest ‘currency’ of all is the earth you stand on.”  
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