Property prices are not expected to come down anytime soon, according to the president of the Bahamas Real Estate Association (BREA), as the cost of materials have "gone through the roof" over the past year.
Franon Wilson said property owners in The Bahamas are still clutching onto the appraised value of their homes. He told Guardian Business that the prices on the market are not always realistic, and while sellers want a certain price, consumers "don't want to buy anything unless it's a deal.
"There is a problem on both sides," he said.
"For those trying to buy land and build, it continues to increase. Things like asphalt, sand and other raw materials... these things have gone through the roof. The fact is it costs the developer to develop that subdivision now more than it did five years ago."
Wilson maintains that he sees the cost of property and the cost to developers continuing to increase into 2012.
Stephen Wrinkle, immediate past president of the Bahamian Contractors Association (BCA), told Guardian Business that the price of materials is now rising at a rate of three to five percent each year. There are two main reasons for this increase, he said, the cost of oil and freight.
Wrinkle stressed the need for The Bahamas to look into alternative construction methods.
"There are costs affiliated with improved facilities. Our material costs have probably gone up an average of three to five percent within the last 24 months. How the costs trickle down at the contract level could be more significant depending on the type of work and any materials that require oil like asphalt shingles," said Wrinkle.
He pointed out how these costs are negatively impacting the housing industry.
"We need to look at the new materials and technologies that are available. We need to try and be a little bit more innovative in the way our homes are built. The cost of putting infrastructure into a development or a subdivision is absolutely astronomical," he added.
He noted that nowadays the consumer pays anywhere from 50 to 60 percent of a development's cost to put infrastructure into a lot.
"It has such a huge impact on the construction and development industry. We address it as a critical component of construction costs. We are going to need to find alternative methods to build houses, because the developer cannot improve his land and make it ready for construction with these huge costs," Wrinkle explained.
"We have to come to some resolution to that problem, so that the consumer (the home owner) will not have to pay those horrendous costs. It's unbearable and we are running out of land in Nassau."

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