State of the Market: Global Recovery
- March 31st, 2010
- in Yachting
Little by little, announcements come of countries emerging from recession. However, it may be deemed more appropriate to be adopting a new realistic approach to the world post the economic crash. Perhaps we are adjusting to a new spin on a realistic situation. Certainly in 2009 there were mass casualties on every level, and let’s face it, some people will not recover. Not everyone that lost their job, home or business in 2009 was in corrupt investments.
Yet, the media continues to draw on optimism as the way forward. According to the National Association of USA Realtors’ website as published in February, “The national housing affordability index (in the USA) closed out 2009 just a fraction below its all-time record high, meaning new and existing houses are now more affordable for a broader group of households than at just about any time in the past twenty years.”
Okay, but what does that mean? Certainly so many foreclosures in the States has brought the average cost of buying a medium house in the States affordable and those buying before the crash need to upkeep their mortgage in the hope that the property market will one day revalue to the original purchase, if not more. Once the foreclosure stocks have depleted, then perhaps we will see the market gain strength on a steady track. The BVI has for the longest time boasted a resilient strength in value in a solid market. This is supported by a no-need-to-sell market and an exclusive high end buyer’s market. Given that non-residents not working in the BVI are only entitled to six months residential permit without legally being allowed to seek work, the combination of having a business and owning a home or working in the BVI and enjoying that property is to a very select few, bar those actually born on the island. Therefore, prices hold as does the seller hold out on the price, a waiting game that retains the value in the market.
International Property Journal cites 2010 as a new reality in terms of global property whereby the fear of economic apocalypse has now gone and a new era is appearing. The article cites several trends of the 2010 market ahead. Perhaps the most interesting to us, and probably most closely related, are safe havens which listed as a factor that could affect the market. The article says, “A germ of a marketing idea will continue to develop as a movement, as buyer and investors look for overseas spots to stash income. Fear of economic collapse will spread, along with Ayn Rand quotes. Smart promoters and developers will market property as a hedge against financial disasters.” That might just be ringing true as developments such as Oil Nut Bay, Scrub Island and Nanny Cay continue to sell lots to the higher end market and also as realty houses promote the BVI as a solid investment being the practical approach. Drawing on local sources, Coldwell Banker’s Chris Smith told me from his perspective that, “Following a quiet summer in 2009 we noticed an upturn in activity in November 2009 which continued through the holiday season. January 2010 saw the usual lull as people returned to the real world and now, as we get into our high season, activity is increasing again. Whilst there is definitely more purchasing interest than last year, properties that are sensibly priced are more likely to move than those commanding a premium as buyers are still being cautious.”
In conclusion, it would be a falsity to say that the BVI did not suffer or continues to suffer in the new world explained to us. Yet, the sun does still shine and the water is still blue, a practical approach in a paradise.