State of the Market
- October 31st, 2009
- in Yachting
Followers of BVI real estate will have noticed that the number of properties listed for sale this year has certainly risen. Hardly surprising, given the pickle the world economy has gotten itself into. But they’ll also have noticed that on the whole, asking prices have not dropped. Locally, the number of transactions is down, but nobody is giving anything away, and prices are therefore holding. In the expat or “Non-Belonger” market, the same is true. Perhaps the nature of the overseas buyer in the BVI has something to do with that. Most of our clients tend to be reasonably successful, middle-aged folks, who enjoy the peaceful, calm way of life here. Let’s not call them dull, but generally they aren’t the nightclub-hopping, casino-loving, risk takers that are found purchasing property on South Beach or in Nassau, Bahamas. So, being somewhat more conservative, perhaps they haven’t lost their shirts in the downturn and therefore don’t have to give anything away at a knockdown price. Just a thought. We wondered if the same thing was happening on other islands. Since Coldwell Banker has offices in 16 islands, we called around.
Brett Mucklow, St Maarten
What we’ve found is that our local market is very strong and resilient. Islands have limited land and no possibilities to expand. We compare our market to some of the exclusive areas in the US such as the Hamptons, where prices hold quite well. Most island populations are growing, so property is in demand. Our island is serviced by direct air flights from 10 or so countries on 3 continents. Outside of PR, we are the largest Caribbean hub. We have a diverse client base. Our economy is only tourism, but it is very diversified. This diversity has insulated us and given some stability. In addition, we have the French side – St Martin – that uses the Euro, so with two of the world’s largest currencies, we are protected as one offsets the other.
Jeyan Stoutt, St Thomas
People buy and sell real estate for a number of reasons and some of those will never go away, no matter what the state of the economy. Changes in people’s lives still happen, and some must buy and sell. A couple who perhaps bought down here in their mid-fifties now have more grandchildren back home than they ever imagined. The kids can’t afford to visit, and Grandma is longing to spend more time with them. So they put the VI house up for sale. Overall though, the volume of transactions is probably down 40 to 45% on two years ago, yet sales prices have actually remained pretty stable for land and villas. We are definitely seeing signs that the worst is over.
JC Calhoun, Cayman Islands
Supply is up – but not as much as we had feared which demonstrates the financial strength of those who invest here and also indicates a growing reluctance for people to liquidate their offshore nest egg. Prices have continued to come down, but on average not anywhere near as radically as our neighbors up north. Those who need to sell and have been properly advised on pricing aggressively– their properties are selling. If Obama gets much of his socialist agenda passed in the US, we expect to see many more American purchasers which will improve our foreign market. Locally, we expect continued slow growth with folks being increasingly careful with their purchases. So our forecast then is for continued cloudy skies with some sunny patches.
Susan Thompson, Bermuda
Consumers continue to purchase real estate in Bermuda, but at perhaps a slower pace as there are more choices. Prices have come down in various sectors of the market which is encouraging for those looking to own a piece of the rock. Overpricing your property is not an option if you wish to sell in this market as buyers are well educated, banks are being conservative with appraisals, and there is lots of competition for most properties. However, ultimately, everything will sell at the correct price.
James Sarles, Bahamas, Grand Bahama, Freeport
Up until about a month ago life was very, very quiet here. List prices were holding up but the number of transactions was way down and actual accepted offers, not that there were many, were far lower than list in certain cases. Now we’re seeing some life coming back into the market. It’s not a full-blown tidal wave, but things are certainly starting to move. People who have been sitting on the sidelines waiting for their homes to sell in the US are finally coming out of the shadows, checkbook in hand.
Gina Harrison, Jamaica
Lower valued properties continue to sell and hold their value, particularly apartments and land. Higher end properties that are competitively priced are taking a longer time to sell while buyers are waiting for a ‘fire sale’ that so far has not emerged. All is not gloomy! For September we have had, by far, the best month for new business for the entire year. This may be due to the Government of Jamaica’s further cut in Transfer Tax and Stamp Duty in order to stimulate the real estate market.
The Boss, Turks & Caicos
Um…he didn’t answer the phone. We can only assume he has decided to take that two-year cruise around the Caribbean he’d always dreamt of. He might as well, given their current political climate!