Tourism and real estate

Tourism officials in Barbados are boasting of an expected increase in airlift from the North American market of 50,000 seats. Moreover those officials are contending that greater efforts will be made to the German market with visitors from that source market being identified as top spenders across the globe. Additionally major airlines have been identified that will be bringing increased airlift to these shores include Westjet, US Airways and Jet Blue. Meanwhile the South and Latin American market have also been identified as holding major potential if funds are allocated for marketing in that area.

The question now comes, with these new or enhanced initiatives underway, are there more opportunities for the local real estate sector?

With the offshore market occupying a major part of the real estate sector and with new developments nearing completion, will there be more buyers who want Barbados to become their second home or those who want an investment property. Traditionally the UK and the US markets have been key offshore markets for Barbados real estate with visitors to the shores becoming home owners.

In reviewing the current circumstance of the global economic slowdown, President of the Barbados Estate Agents and Valuers Association, George Ramsay disclosed, “Our market is reacting to external economic pressure and property prices have obviously declined as a result. I would agree that a buyer will find a market that is by far more sympathetic to negotiation. Traditionally, the Barbados market may become soft but, to date, it has not followed the international markets where prices have tumbled.” His comments indicate that the current period would be a good time for an investor from off-shore market to make an investment property theirs particularly if they have the long-term in mind.

The Central Bank of Barbados does not hold onerous regulations on those looking to buy property in Barbados. Non-resident non-nationals are required to hold to certain Central Bank of Barbados regulations in purchasing property in Barbados. These include that financing for the foreign purchaser must be obtained overseas or, it be can done in Barbados, but it has to be done through an offshore financial institution. These funds must also be registered with the Central Bank. With that regulation comes with the advantage of when selling that same property owner can subsequently repatriate his/her buying price and the profit.

But in order to get the potential investors or tourists here to begin with, local tourism executives and hoteliers at the Third Quarterly meeting at the of September 2009 highlighted a number of their concerns all of which come to bare on visitor arrivals. Among the concerns outlined there were BTA marketing, e-commerce website, financial aid, performance based incentive scheme, training, research and information, wages, regulatory environment. If these issues are addressed in the near future there could be a greater performance from the tourism sector which has seen a slowdown for 2009 and has a forecast for a slow winter season as well.

It is is true that greater airlift does not necessarily translate into greater sales for real estate in Barbados. But it does create a window of opportunity for the island to be seen by greater travelers and for them to consider the prospect of making Barbados a second home or good investment. While property prices in Barbados have been mediating in recent times, those prices have never declined like those in the US and other markets. So again the permanency real estate investment, particularly real estate investment in Barbados appears very attractive to those looking to park their investment in a safe harbor.