Followers of BVI real estate and those looking to buy or sell will have noticed that the number of properties listed for sale this year has certainly risen. Hardly suprising, given the pickle the world economy has gotten itself into, but what they will also have noticed is that asking prices have not dropped. Yes, the odd one or two may have gone down a dollar or two, but most have not – and some have actually gone up. That’s not to say that accepted offers might be lower than they might otherwise have been, but to be frank, we’re not seeing a lot of that either.
Locally, all the indicators would suggest that the BVI economy in general is down a bit but is certainly not as bad as elsewhere in the world. With caution being the better part of valour, the number of real estate transactions locally is down but certainly nobody is giving anything away and prices are therefore holding. In the ex-pat or ‘Non-Belonger’ market, the same is true.
Perhaps the nature of the overseas buyer in the British Virgin Islands has something to do with that. Most of our Non-Belonger clients tend to be reasonably successful, middle-aged folks, who enjoy the peaceful, calm way of life here. They had the patience to survive the process of purchasing property in the BVI so they certainly passed the first test! Lets not call them dull, but on the whole they certainly aren’t the nightclub and casino-loving, gambling, risk takers who are likely to be 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 bargain basement price. Just a thought.
There is, of course, one far more obvious reason why prices of BVI real estate have held up. There’s not much of it – there is a limited supply – and lots of people would still like to own some, given how beautiful the islands are. Now, as we all know, there are lots of scenic places in the Caribbean, so we wondered if the same thing was happening on other islands.
Coldwell Banker has over 3700 offices in over 47 countries around the world, including offices on 16 islands throughout the Caribbean (we’ll include Bermuda since they are really one of us, even if that’s not quite geographically accurate). So we thought we’d call around and find out if other islands are experiencing similar things in their markets. Here is some of the feedback…
Brett Mucklow, St Maarten
Our local market is very strong and quite 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. Cruise ship business, timeshare, villa rental and the marina/mega yacht industry are all parts of our tourism foundation. 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. French currently shop on our side as the Euro is strong and visa versa when weak to the dollar.
Amy DeWilde, St. Croix
St Croix has been prominently featured recently in US national publications like Coastal Living as #2 [in their article] of the top ten spots to snorkel in the Caribbean, and in USA Today’s Destination section. Recognition like this and the discovery of our extremely attractive real estate values are keeping our market active. There is good inventory for buyers. Sellers who recognize the need to be flexible with both price and financing options can successfully find a buyer. Our market is also helped by the lowest interest rates we’ve seen in a long time.
St. Croix’s very diverse topography, many attractions that appeal to nature-lovers and history buffs, some of the best diving in the Caribbean, and great dining are but a few of the reasons that buyers from afar decide to make St. Croix either their primary or second-home destination.
Susan Thompson, Bermuda
As the leading real estate company in Bermuda, we are constantly called upon by consumers, attorneys, bankers, architects, developers, and other businesses for our in-depth industry knowledge. That is why Coldwell Banker Bermuda Realty takes great pride in recording real estate sales details, to ensure we are armed with factual and supportive data that assists companies and individuals to make informed financial decisions. Our database (‘Realty Plus’) extends back 20 years, has in excess of 7,500 entries recording over $5.5 billion in island-wide real estate transactions. We have incorporated over 30 search criteria, thereby permitting queries by name of property, date of sale, acreage, price bracket, property type and much more. We can carry out research assisting our local and international clientele to make very important decisions relating to property acquisition.
A year ago in June, we reported that during the first half of 2008, the average price of all real estate transactions was slightly more than $1,000,000 with single family homes approximately $1,400,000. Compare that to figures recorded to date for 2009 (bearing in mind that 2009 records have not been finalised) of $950,000 for all records and $1,460,000 for single family homes. Conversely, the average price for condos was $823,000 in the first half of 2008 verses $733,000 thus far for 2009, signifying an approximate 11% decrease in condo prices, but very little variance in other areas of the market. It is interesting to note that this figure is reminiscent of 2004 when the average price of condominiums was $742,000.
On the inventory side of the equation, we currently have 295 active listings. The yearly average number of sales transactions island wide over the past five years is 553, hence the current inventory represents just over 6 months supply. Condominiums still represent 60% of the inventory, which is good news for first time buyers looking for 95- 100% financing. The banks are still lending up to $1,000,000 to qualified purchasers and 36% of the inventory is presently in this price bracket.
In conclusion, 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.
Louise Peterson, Turks & Caicos
Due to the large number of condo projects that completed in 2008 and 2009, and the slow down in the North American economy, current inventory levels in the TCI are up around 20%. We’ve experienced price softening somewhat especially in the condo and in-land housing markets.
As the new kid on the block, TCI found over the last 12 – 15 years demand strongly outweighed supply. This meant few prime properties were available for sale and year-over-year prices continued to rise. Record pricing levels were achieved along the Grace Bay hotel and resort area, as well as waterfront homes and estates. The basic fundamentals have not changed though, and TCI offers a fantastic lifestyle investment opportunity- particularly for Canadians, where the market has stabilized in the major cities since late spring and their dollar is strong. Owners in the TCI wishing to sell their properties over the next season have priced it accordingly, and have begun to see activity pick up with multiple and back up offers being presented.
Savvy investors are returning to take a second look at TCI. Value is key and this new or returning investor is looking to hold the real estate for the long term. Inventory levels remain high but this means that purchasers have an opportunity to select from properties not previously offered for sale and at levels not seen in the last 3-4 years.