Amid good expectations for the property market in Barbados and the Caribbean by some estimates, other global markets appear to be witnessing some measure of positive signs as well.
According to a UK-based property portal, the UK residential property prices have increased to their highest level since November 2007 and are now almost 6% more than a year ago, according to the latest real estate index.
Prices were up 0.4% in December, the eighth monthly increase in a row, and are now just 12.2% down from their peak in October 2007, says the index from the Nationwide building Society.
The UK Nationwide’s chief economist Martin Gahbauer said a year ago such a rise was unthinkable and he put it down to pent up demand in the market place and cash rich buyers driving the market forward.
The data shows that, unless there is another sharp move lower, UK house prices have recovered more quickly and fallen less far than many analysts predicted.
But the rate of price increases is slowing.
Meanwhile in the US, as explained by another publishing house, the average home prices are now equal to prices in Fall 2003. The headline estimate of a 30% fall still to come is based upon a trendline derived from data between 1987 and 2000. The presumption is that the values after 2000 are bubble values and that they should be excluded.
Another UK based real estate firm has explained that property is set to return to investors’ portfolios in 2010 as the asset class becomes popular with investors once more.
In Barbados according to real estate experts, 2010 should be a balanced year for both buyers and sellers. One of the most noted developers in Barbados has argued that it will not simply be a good time for buyers but that sellers should see some benefits as well and it is likely to be a more balanced market for the industry.
Strategically Barbados is a wise choice and the time to buy is now. This is declaration of one the island’s property consultants who is also Director of Sales of Altman Real Estate, about the state of play of foreign investment in the real estate sector in Barbados.
Terry Hanton makes this assessment in a self penned article entitled: The Strategic Value of Foreign Ownership of Real Estate in Barbados. While giving his analysis of the market, Hanton points out “…there is a strong sense that the real estate market worldwide will recover in 2010. The estimates of recovery are founded in trends in the demographics of populations and will be linked to more conservative lending practices and to an overall economic recovery which seems to have already started.”
Additionally he contends that as an asset class, an investment in real estate now, whilst prices are low, would seem to be strategically wise. He also explains that deposit and savings rates (“safe havens”) are still very low and will probably be for the foreseeable future. So, an investor with a mid to long term capital growth strategy will find it difficult to beat inflation in near cash investments.
In looking to answer the big question – why would it be wise to invest in Real Estate in Barbados? The property consultant argues that, maybe for the first time in the last 30 years, prices in Barbados have fallen.
He explains that the fall in prices is pretty much across the board including: lot sales, single family homes, condominiums and commercial properties, etc. So there are bargains to be had and many of this year’s buyers have been savvy and opportunistic.
It is explained that the main characteristic of the buyer for 2009 is that they have already been shopping around for a few years and they know exactly what they want and how much they think they should pay for it. This is in stark contrast to the spontaneous buyers of the boom years when holidays were a time to spend money. Barbados has a history of capital appreciation averaging over 10% per year, over the past 15 years. When prices stabilise, value growth should re-emerge given the scarcity of good sites and beachfront land in particular.
According to Hanton, the supply of real estate targeted at the foreign buyer has reduced. Many planned projects have been put on ice and a few have been shut down by the banks or by the developers. There were concerns two to three years ago that there may be as many as 3,000 foreign-targeted properties chasing an annual demand of about 300 sales. Simple arithmetic tells us that 10% absorption per annum makes for unsuccessful developers. Now the supply is a little above 1,500 units, which is far more manageable and indicates that buying the right property at the right price will result in good capital appreciation.
Finally, and most importantly, a careful assessment of the qualities Barbados has to offer leads to the simple conclusion that an investment here is far safer than in many of the island competitors. Barbados’ success in the luxury real estate market inspired many ‘wannabe’s’ to enter the market but most have failed. There are many reasons for their failure: for example, the volume of airlift and the demographic of their visitors; but most importantly it is the quality of the lifestyle. When a foreign buyer makes a choice of which island to buy in, he or she does not want to be a prisoner in the community they choose.
They want to interact with the local population and they want to feel safe and be part of a community of kindred spirits. They also want to enjoy the shopping, the restaurants, go to a show or hone their skills in their chosen sport at the best facilities available. Barbados has these qualities in spades; most of the other island destinations simply do not.
One of Barbados multi-million dollar west coast developments should see a early 2010 start to its construction.
Beachlands, a 4 and half acre west coast development in the heart of Barbados’ ‘Platinum Coast’ is about set to begin its much awaited construction phase.
Word from the TerraCaribbean team is that construction at Beachlands will begin in Spring of 2010 with anticipated completion in Spring 2013.
The news of an early 2010 start for construction is a good sign for the industry which has been described as going through a period of transition over the last year. It is also a good sign for the coming year, as it is in line with the outlook that some industry leaders have given, that 2010 should be a positive one, providing benefits for both sellers and buyers.
According to information from the Terra office, the property developers have released 20 of the 55 units for sale, starting at US $2million. The property will have 2 to 5 bedroom apartments and also 3 and 5 bedroom penthouses, which are set to be beachfront units offering the most floor space per unit on the island’s west coast within a property development.
At the start of 2008, the expectation was that the development would bring in excess of US $200 million in investment of the west coast development.
The Beachlands property is set to maintain and enhance the integrity of over 700 feet of prime beachfront land. Its design and architecture will marry the old colonial style with modern finishes in one space.
The Lewis Trust Group (LTG) of the UK are the owners of the 4 acre property and that commercial group has property in 12 other countries across the globe.
The lead local construction firm for the project will be Jada Construction. The apartments will be outfitted with the some the most high end features which have both the classical and modern finishes.
