Tide of optimism across the Caribbean
Last year, British realtor David Redfern was marketing what he believed to be the cheapest property in the Caribbean: studio apartments in the Dominican Republic priced from just GBP24,000 (HK$300,866).
The Apart-hotel, Sousa Plaza, quickly sold out, as did another bargain-basement development in Isla Margarita, and prices like that are unlikely to be seen again. But Redfern, of Buy Overseas Property, says the strong demand was reflective of a new period of optimism in the Caribbean, with buyers again prepared to commit once they spot a bargain. Those properties were cheap, Redfern says, because they were located in the least developed of the Caribbean countries. 'Living costs are the lowest, and people can go there on holiday with half the spending money they would need elsewhere.'
At the opposite end of the price spectrum in the West Indies, a 3,600km-long archipelago also known as the Caribbean, is Barbados. A popular place for stars and celebrities to visit, Barbados boasts some of the most picture-perfect beaches, year-round sunshine and luxury developments galore. It also reportedly has the most expensive real estate.
According to the Global Property Price Guide, Barbados property prices slowed in 2009 due to the financial crisis, but have remained mostly stable. Nick Guezen, director of real estate at elite private brokerage Luxury Retreats, says sellers can afford to wait.
'Barbados' history of increasing real estate values helped it stay strong through the slowdown without prices falling dramatically,' he says. 'Sellers in Barbados had the means to wait out the storm.'
Global Price Guide data shows that in the years leading up to the economic downturn, Barbados property had an annual increase of 10 to 15 per cent, with luxury houses appreciating the most. Its 2010 market report found Barbados had the most expensive luxury properties in the Caribbean, at prices from US$4 million to US$40 million. 'For the extremely wealthy, there are houses that come with US$75 million price tags,' it says.
Property consultant Cluttons says this will be the year that puts Barbados 'clearly back on track'. Sales at its Barbados office were up 70 per cent last year on 2009's results, evidence that buyers are returning. 'Villas, hotels and flights are booked up,' the firm says.
Cluttons' latest market report asserts that although property prices dipped by up to 15 per cent since mid-2008, Barbados has proven its strength. 'If anything, the financial crisis has placed Barbados in a better position, as competing and alternative destinations have faltered quite dramatically,' it says.
Kieran Kelly, of Cluttons Barbados, does not expect values to rise this year, saying this is a good time for buyers to negotiate. 'Homebuyers are attracted by the potential to negotiate a discounted price with high expectations of rental and capital growth. This is based on the stability of the economy, exchange rates, location and the quality of properties that Barbados has.
'There is a comfort level attached to securing a good deal or discount on a property in prime locations such as central London or Barbados. Those buying now will do well, as Barbados has an exciting future.'
When Guezen calls St Barts the 'hottest market in the Caribbean right now', he's not talking about the weather. He's referring to the world's elite who, having partied hard there over the holiday season, are putting their money where their dancing feet are. 'St Barts is the place to be,' Guezen says. 'The biggest yachts in the world are there, and the top celebrities, and a lot of CEOs and their families, go there for their holidays.'
Guezen believes St Barts and Mustique are starting to nudge Barbados for the most expensive real estate because their smaller size adds exclusivity. 'If you want something on the beach at St Barts, you would be fighting for one of a dozen [luxury] homes,' he says.
One of the fastest-growing markets is Turks & Caicos. Providenciales (or 'Provo'), the most popular in the chain of 40 islands and cays just below the Bahamas, has a 'fairly plain' interior, but some of the best beaches. Investors who bought on Provo six or seven years ago have doubled their money, Guezen says, adding that he still feels the market has room to grow.
If it's privacy you're after, St Martin is your place. Subdivision in the Terres Basses area (or French Lowlands) was restricted to a minimum 2.5-acre lots. Guezen says: 'This has created some of the most private and highest end developments in the Caribbean, and our number one destination in terms of holiday rentals.'