Barbados continues to appreciate despite the economic downturn
Property prices in Barbados are appreciating at between 10 – 15% per year at the middle of the market and often higher at the luxury end, even during these harder economic times.
Cluttons Barbados says the property market remains in a stage of growth and has been driven by a strong economy and well established tourism industry. Barbados has fantastic amenities, golf courses, spas and restaurants with direct flights from major cities and of course the great climate and beaches! In recent months Cluttons Barbados has seen a considerable upturn in the high end market and can only think that people are becoming less patient with the lifestyle in the UK. This has all led to a winning formula for British buyers.
In the recorded history of property on the island, property values have never declined. Unlike larger countries where property values have come under pressure from issues such as the financial downturn, Barbados property values have continued to show significant strength. It should be noted that the middle market developer or homeowner is now a little more flexible and will entertain some negotiation, however the property market in Barbados is currently holding its own.
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Source: The Property Wire
An island of prosperity as storms ravage world housing
The credit crunch has put paid to property booms around the globe, right? No, not quite. While the US, UK and European property markets are in price freefall, the Caribbean, and in particular the holiday island of St Lucia, seems to be holding its own – for the time being at least.
"Property prices have remained robust throughout the financial crisis," says Allen Chastanet, St Lucia's minister for tourism. "The key is we didn't have a boom to begin with, so building levels were at sustainable levels. Therefore, we're not having a bust.
"The only price softening that has taken place has been reflective of the pound weakening against the dollar," he adds, with reference to the fact that St Lucian property is priced in dollars. "Sellers have been willing to bend prices a bit for British buyers to reflect this currency shift."
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Source: The Independant
Puerto Plata Emerges as the New Coast of Eco-Style and Activity - The Caribbean's secret is out...
‘The world Bank’s international financial corporation (IFC) chief praised Dominican Republic’s 13 point advance in the ‘DOING BUSINESS 2009’ report, as one of the worlds TOP 10 REFORMED NATIONS’
DOMINICAN REPUBLIC, -- Puerto Plata, the largest city on the Dominican Republic's (DR) North Coast, is seen as a shining star for the country's tourism industry. With championship designer golf courses, shopping, casinos, night life, rejuvenated local beaches and other new developments planned, Puerto Plata is creating a reputation as one of the Caribbean's most popular emerging tourist destinations in the DR attracting international travellers, sports champions and celebrities alike.
Known as the country's most versatile playground, Puerto Plata is an excellent destination for those seeking fun, adventure and enriching activities. Here vacationers can rub elbows with the rich and famous who come for the North Coast's luxurious accommodations.
Travellers with limited vacation time often find themselves hard-pressed to choose from the vast list of activities Puerto Plata has to offer. Top attractions in Puerto Plata include: Ocean World, Playa Grande and Play Dorado’s Golf Course.
In addition to a vast variety of activities, Puerto Plata offers a beach lover's paradise with the beaches of Playa Dorada, Costa Dorada, Playa Cofresi, Playa Sosua and Cabarete. "The North Coast boasts some of the world's most breathtaking white sand beaches surrounded with brilliant shades of turquoise," said DR Minister of Tourism Francisco Javier Garcia. "As of late 2008, the DR has put an initial investment of nearly $25 million into the rejuvenation of seven DR beaches, including a five kilometres stretch of beach east of Long Beach city. In addition, the adjacent stretch from Costa Dorada to Playa Dorada and Cabarete on the North Coast has been doubled in size for traveller’s beach relaxation."
The word is out. Puerto Plata is the "it" destination for adventure and eco-travel along with stunning luxury accomadation. With its laid back and relaxing atmosphere, culture and desirable warm weather, Puerto Plata is an astonishing place that will delight even the most experienced traveller.
Dominican Republic reaches record visitor numbers
Work by the government in the Dominican Republic to boost investment is working as the latest tourism figures show a record 8% increase in arrivals in 2008 so far.
The government and private sector of the Caribbean island have been working together to encourage investment and maintain a macroeconomic balance and a major part of that strategy has been to boost tourism.
Now they expect visitor numbers to reach 5 million by 2012. Marketing is aimed at encouraging visitors to an island with palm fringed white sand beaches and a near perfect climate while the government is investing in new roads, amenities and facilities.
The Tourism Minister Felix Jimenez said the record 8% increase was very encouraging. He announced that the island's 2008 – 2012 Tourism Plan is designed to increase the current 170,000 visitors to 5 million that will generate 200 million dollars in annual revenue.
Supporting this plan is significant investment into increasing hotel bed capacity and also increasing the amount of residential resort style real estate in the Dominican Republic. The World Travel and Tourism Council predicts that this period of intensive advancement in tourism will result in at least a 3.7% annual increase in real GDP growth for the nation's travel and tourism economy over the next decade.
'This could be a good time to invest into the undeniable potential that the Dominican Republic represents. Not only is the nation affordable and committed to maintaining its accessible status as one of the most reasonably priced Caribbean destinations, but millions of dollars of investment are going into everything from golf courses to marinas, from boutique style shopping malls to spas and sports facilities.
'It is already the Caribbean's Number One Destination according to the World Tourism Organization, the Dominican Republic could soon be the number one destination for luxurious yet affordable resort style real estate offering exceptional rental yields in the region too,' he added.
The increase in demand for properties for rent from the growing tourism base is allowing developers to offer rental guarantees to would-be purchasers, and to even offer these rental guarantees on top of allowing owners access to their properties for their own use.
Source: The Property Wire
Caribbean attractive to Indian investors
An international consultant says the Caribbean is fast becoming a major target for business and major investments from India and suggests that the investment from this South Asian country could actually dictate the pace of economic growth in the islands.
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Buy to Let Hotel Investments
Buy-to-let hotel investments offer a great way to generate income and are less hassle than trying to manage and let out a traditional holiday home.
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Merrill Lynch has recently published the World Wealth Report 2008
It reports on the wealth of the world, and in particular how the various property markets are doing.
In summary:
a) There is more money available globally than before
b) There are more millionaires than before
c) This wealth is being created from emerging markets – and the Caribbean is named as a HOTSPOT!
d) The ultra wealthy look to invest in places with global communications, sports facilities and a green policy – all of which we have!
Therefore there is still wealth to be invested, and there is still wealth spending money on tourism!!
Interesting quotes from the report:
Source: Robert McCann Vice Chairman and President Global Wealth Management Merrill Lynch & Co. Inc.
Merrill Lynch Global Wealth Report 2008
"The US economic slowdown weighed heavily on key mature regions. However strong performances in emerging markets boost high net worth individuals gains around the globe....world growth was strong in 2007 and drove sold increases in both HNWI populations and overall wealth"
"Growth in global HNWI wealth of 9.4 from the previous year"
"Emerging markets (showed) the greatest...gains"
"50% more cash available in Russia"
"still strong...emerging markets are likely to sustain high levels of growth"
"globally direct commercial real estate investments rose 8.4%"
"as signs of financial market recover appear, we project that high net work individuals will likely return to their pursuit of high returns, particularly in emerging frontier markets - such as the Caribbean"
"despite rising cost and financial market turmoil, high net worth individuals did not give up expensive purchases" IE Luxury purchases including property and travel.
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Quotes and Information on the Caribbean
Liam Bailey, Head of Residential Research Knight Frank
"global property prices rose by 11% during 2007"
"highest price growth achieved by prime residential properties was in Antigua (40%)"
"the strongest growth was being demonstrated in the emerging economies...with a second streak of strong growth in second home hot spots in…the Caribbean"
Financial Times, 21 April 2007
‘Demand from buyers has been strong… and property prices rose 40 per cent last year as a result.’
Ft.com, June 1st 2007
“What we are seeing in the Caribbean is a lot of new development going on and it appeals beyond the US: it appeals to the Europeans who are attracted to the Caribbean.”
Ft.com, June 1st 2007
“People are spending from $4m to $10m on the houses in the region. Certainly prices in the Caribbean are higher than in the past. It’s not difficult to spend $15-$20m or even $40m for really top of the line estates”
Ft.com, June 1st 2007
Mr Ryan recounts how the project began, 10 years ago. “In 1997, Ritz-Carlton invited me to do a project here. They are a management company, and saw that the market was underserved. They saw potential here. They tried to get the project done on their own and, when it did not happen, they decided to reach out to a developer. ‘If you make it happen, we will give you a brand and manage it,’ they told me.”
Ft.com, June 1st 2007
“The average appreciation is 12 per cent a year for the past 17 years. Bear in mind that this return is not taxed by the local authorities.”
www.Propertyweek.com, 4th April 2008
In 2007 the small overseas property fund outperformed the UK real estate by around 50%.
Peter De Savory, quoted on www.Propertyweek.com, 4th April 2008
“You can buy first class new land for $700 to $1,200/sq ft. In Barbados it’s around $2,500.”
“It’s not as if all the rich people have died,’ he says with a wry grin. ‘Leisure is quite a protected sector. There will always be people who need a holiday in the sun, and not everyone in the world wants Dubai or the south of France.
‘Provided you are creating value in the mind of the customer then the price is not the issue. It’s not whether it is expensive or cheap. We’re not providing people with essentials we are providing them with an indulgence. ‘Value is intangible. It’s about an aroma of attractiveness. There is no logic to it…
Figures from World Tourism Organisation, “Tourism highlights 2007”
Globally, international arrivals have grown by 400 Million people since 1990, a growth rate of 94%, averaging 3.6% per year since 2000. Within the Caribbean, international arrivals have increased by 8 million people in the same period, an increase of 41.2%, with an average of 2.2% since 2000.
Ft.com, October 3rd 2004 and March 28th 2003
The tourism industry brings the Caribbean’s struggling economies about $20bn (£13bn) a year, and accounts for 30 per cent of gross domestic product and provides one of every four jobs.
The $20bn tourism industry is the ‘economic mainstay’ for many of the Caribbean's island states. For example, ‘the gross domestic product for the Bahamas was $5.3bn last year. Seventy per cent of that was generated from tourism-related business.’
Quotes and Information Specific to St Vincent & The Grenadines
Tourism
www.svgtourism.com
Caribbean tourism organisation, “St. Vincent and The Grenadines 2006”
In 2006 the breakdown of international visitors to St. Vincent and The Grenadines breaks down as follows:
US 28,598 (29.4%)
UK 14,837 (15.2%)
T&T 11,002 (11.3%)
Canada 6,542 (6.7%)
Other Caribbean 27,217 (27.9%)
Other Europe 7,214 (7.3%)
Rest of World 2,112 (2.2%)
The number of UK visitors to St. Vincent and The Grenadines in 2006 was 14,837, 15.2% of the total number of visitors to the island (94,432). The total number of arrivals has increased by 25.5% since 2002 at an average rate of 5.93% per year during this period.
In 2006 Total Expenditure by tourists was $95.6 million.
The Tourism Budget was $3.474 million.
In 2007 total visitors increased by 16.5%. The UK (21.4%), Canada (8%) and USA (2.7%) all saw significant growth.
Economic Growth
Eastern Caribbean Central Bank
Between 2003 and 2007, the economy in St. Vincent & The Grenadines has grown on average at 6.03%
Tax Incentives
National Investment Promotions Inc
In line with the governments aim to encourage growth in Tourism concessionary rates of tax are payable on property.
For tourism related development where the occupancy tax is applicable and the annual rental value exceeds $20,000 the tax charged is 1.5% rather than the usual 5%.
Investment Promotions Inc
Hotels with more than 35 rooms are granted 15 years income tax exemption from date of opening of the resort.
An approved construction order grants concessions for construction materials for excise duties and consumption tax
Resorts accommodating more than 100 people are exempt from import duties on food and beverages.
Quotes and Information Specific to Barbados
Tourism
Figures from Caribbean tourism organisation, “Barbados 2006”
In 2006 the breakdown of international visitors to Barbados breaks down as follows:
2006 visitors UK 211,523 (37.6%)
US 130,767 (23.2%)
Other Caribbean 82,989 (14.8%)
Canada 49,198 (8.7%)
T&T 34,480 (6.1%)
Other Europe 29,400 (5.2%)
Rest of World 24,201 (4.3%)
The number of UK visitors to Barbados in 2006 was 211,523, 37.6% of the total number of visitors to the island (562,558). The total number of arrivals has increased by 13% since 2002 at an average rate of 3.13% per year during this period.
In 2006 the total Expenditure by tourists was $ 763.2 Million. This averaged out to $127.48 per day for each tourist in Barbados.
Economic Growth
St. Lucian Budget Address for Financial year 2008/2009
Economic growth for Barbados in 2007 was 4.3%.
Ft.com, January 23 2004
When considering the welcoming nature of the locals to settling tourists it is worth considering the Bajan Governments policies. Described as “far-sighted,” All its beaches are available for use by the whole population as they are national property. This encourages integration between visitors and Bajans.
Tax Incentives
Barbados Tourism Investment Inc, “Legislation and Incentives”
One of the main tax incentives offered by the Bajan government is the Tourism Development Act. This was designed to offer incentives to expand the tourism and hospitality sector by offering incentives and corporation, Import Duty and other tax concessions.
These incentives also include provision for “investors in tourism projects to benefit from write off of capital expenditure and 150% of interest. There is also exemption from import duty, value added tax and environmental levy in respect of furniture, fixtures and equipment as well as building materials, supplies and equity financing.”
Concessions under this act include:
Duty-free importation (including waivers of Value Added Tax (VAT) and Environmental Levy) of building materials and equipment during construction and rehabilitation;
Duty-free importation (including waivers of Value Added Tax (VAT) and Environmental Levy) of supplies for refurbishment of hotels, restaurants, villas and sports and recreation facilities for tourism purposes;
Extended tax holidays/write-off of capital expenditure and accelerated write-off of interest;
Training of employees;
Marketing
PriceWaterHouseCoopers, Tax, Facts and Figures: Barbados 2006
Barbados also offers other tax concessions. Land tax is calculated and payable on only 50% of the improved value of the property for hotel developments.
Quotes and Information Specific to the Dominican Republic
Dominican Republic: Tourism and Economy Statistics and Government Incentives
Tourism
Figures from Caribbean tourism organisation, “Dominican Republic 2006”
In 2006 the breakdown of international visitors to the Dominican Republic breaks down as follows:
USA 1,092,317 (27.5%)
Other Europe 812,511 (20.5%)
Canada 509,323 (12.8%)
UK 242,559 (6.1%)
Germany 226,737 (5.7%)
Italy 144,115 (3.6%)
Other 937,493 (23.6%)
The number of UK visitors to the Dominican Republic in 2006 was 242,559, 6.1% of the total number of visitors to the island (3,965,055). The total number of arrivals has increased by 43% since 2002 at an average rate of 9.62% per year during this period. The Dominican Republic had the largest number of visitors of any Caribbean Island, making up 2.9% of the all visitors to the Americas region.
In 2006 the total expenditure by visitors was $3180.4 Million.
World Tourism Organisation, “Tourism highlights 2007”
The Dominican Republic had the 2nd largest increase in visitors throughout the whole Caribbean in 2007: 7%
Economic Growth
Caribbean update, May 2008
In 2007 Foreign Direct Investment (FDI) increased in the Dominican Republic by 16.3% to US$723.3 million. FDI for Real Estate increased by 120% and in tourism by 58.1%.
Tourism Development Law - Guzman Ariza Law Attorneys
This is a good example of Dominican incentives to increase pace and process of development in the tourist industry.
Qualifiers for the incentives include: Hotel facilities, resorts and/or hotel complexes; Construction and/or operation of tourist infrastructures, such as aquariums, restaurants, golf courses, sports facilities, and any other that may qualify as a tourist activity.
The Incentives for Businesses domiciled in the country include one hundred percent (100%) exemption from paying the taxes listed below:
1. Income tax
2. National and municipal taxes levied on the use and issuance of construction permits, including land purchase documents.
3. Import duties and other taxes, such as tariffs, fees, late charges, including the Tax on Transfer of Industrial Goods and Services (ITBIS) that are applicable to the equipments, materials and furnishings needed for initially equipping and putting into operation the tourist resort concerned.
Quotes and Information Specific to St Lucia
Tourism
Caribbean tourism organisation, “St. Lucia 2006”
In 2006 the breakdown of international visitors to St. Lucia breaks down as follows:
USA 117,450 (39.8%)
UK 73,312 (24.2%)
Canada 17,491 (5.8%)
Caribbean 78,464 (25.9%)
Other Europe 9,648 (3.2%)
Rest of World 3,450 (1.2%)
The number of UK visitors to St. Lucia in 2006 was 73,312, 24.2% of the total number of visitors to the island (302,510). The total number of arrivals has increased by 19.4% since 2002 at an average rate of 4.68% per year during this period
In 2007 the total expenditure by visitors was $808.3 Million
The tourism budget was $6.918 Million.
In 2007 Visitors from UK rose 8% and Cruise ship arrivals rose 69.7%.
St. Lucian Government, “Tourism by numbers” Budget Address 2008-9
The St. Lucian Government has allocated an extra 148% funding to the tourism industry from 2004 – 2008, with an average increase of 27.7% per year. The allocation for the tourism sector in 2008 – 2009 was $53.6 Million.
Occupancy rates increased on small properties 10.7% and an average of 6% over 2 years to 70.3%. The whole island had an occupancy rate of 67.8% up at an average of 4.5% over 2 years. In 2007 the Hotel occupancy was 69.7%.
In 2007 the number of UK stay-overs increased by 8%.
Economic Growth
Eastern Caribbean Central Bank, Annual Economic and Financial Review 2007
Economic Growth in the St. Lucia has been on average 3.45% between 2003 and 2007.
Budget Address 2008-9
In 2007 the real estate sector grew by 7.6%.
St Lucia the new tourist destination
Ft.com, 10 May 2008
“…now there’s another Caribbean location for those wanting a home combining sun and the simple life in the shabby-chic style of the old Barbados. Welcome to St Lucia.”
Financial Times, 21 April 2007
“In an effort to protect its natural heritage from overdevelopment, the Caribbean island's government now has an environmental section in its ministry of planning and nearly 30 laws setting out restrictions on new construction. But Dolby, whose company, DCG Properties, is building the £400m Le Paradis next to the sleepy village of Praslin on St Lucia's east coast, says he welcomes the safeguards.”
"Spoil a place like this," he says, sweeping his arm across a 550-acre vista, "and you spoil your greatest asset.”
“St Lucia is as progressive in its property schemes as it is in environmental protection, with a growing number of resorts where developers, hoteliers and owners share both risk and profit.”
Ft.com, 10 May 2008
“Recent changes to limit development include a compulsory environmental impact survey to measure the effect of a scheme on land, local people and wildlife. There is also a ban on building new homes within 100 metres of the coast.”
The local authorities are acutely aware of the high density building on some of the other Caribbean islands,” says Charlotte Wilson of Savills, the London-based estate agency that sells property on the island. “They’re working with conservationists and introducing restrictions to ensure St Lucia doesn’t go the same way.”
Global credit markets may be depressed but the investment banking community continues to show strong interest in doing business in the Caribbean.
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There is strong interest in the Caribbean from the investment community that is looking at the future and the vacation market continues to be healthy.
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St Lucia & St Vincent offer excellent overseas investment prospects to escape the UK property crash
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