The expectation for Barbados local real estate market for 2010 is that it will remain flat, while existing supply meets demand.
This is the conclusion of Andrew Mallalieu, Managing Director of Terra Caribbean as he gave his projections for the two real estate markets in Barbados for 2010.
In the annual market publication called Red Book 2010, Mallalieu explains, “Price growth will be more influenced by affordability constraints than it has been in the past. Beyond that period we anticipate a low growth economy with land supply and finance constraints leading to a situation of slow but steady growth.”
According to Terra, on the resale side for completed homes it is likely that exposure periods will lengthen and prices will be flat during the year. Furthermore the real estate boss adds that they expect that by the last quarter of 2010, the market will gain strength and will likely end at or slightly above, the starting point for the year.
In making these projections Mallalieu also gives a description of the climate that was dominant over the last year, he says, “Market confidence has been eroded while the fundamentals of supply and demand have remained steady. Some buyers may have delayed purchase decisions awaiting a renewed personal and market confidence – a phenomenon that was experienced around the world.”
Looking at the local market through a 2010 lens, the real estate expert notes that the trend is still continuing. He argues, “Today we see a continued slowing in demand in the local market. Serviced lots in Barbadian neighborhoods have seen modest price reductions of say 5 to 10 per cent and if not that, certainly no price growth in the past 12 months.
But on closer analysis Mallalieu contends that an opposing force has been influencing the supply side of the equation. According to him that opposing force is Government policy, with the change of use of land from agriculture to residential.
The Terra boss points out that the current government is looking at such applications in a different light when compared to past government administrations. He argues that the current government gives the impression that less land has become available or will become available for residential subdivision. He adds, “While such a shift has not completely made up for the fall in demand it has dampened the effect of such.”
