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Caribbean Property Weathers Global Storm
April 1, 2009Article by Ray Withers
Property prices may be going under around the world, but Caribbean property is still holding value.
The main reason is that property in the Caribbean never experienced the boom cycle with the rest of the world, so is not feeling the pinch so badly from the bust. Certainly prices increased, but development is more restrained and the island governments try to keep a tight rein on supply. No doubt the global financial crisis will have an effect on Caribbean real estate , but the forecasts are the hit won’t be as bad as elsewhere. It’s a simple law of economics – if supply outstrips demand, then prices adjust to meet the market conditions, which is what is happening worldwide.
Caribbean property investment strategy is a little different from many other places. Instead of buying a second home or retiring permanently, investors tend to buy a resort property. For most of the year, the property is managed and let by the resort and for a month or so; the owner has free use of the property for a holiday. Sometimes the properties are available longer for a discounted payment to the resort. This way, investors have a sunshine holiday while they have a hands-off passive income from the resort rentals form the rest of the year.
Typical investments include resort real estate offered by international specialists Property Frontiers, of Oxford. They are handling sales in several resorts on different islands:
Villas and apartments in Frigate Bay, Saint Kitts , bordering the Royal St Kitts Golf Course, priced from £188,000 to £448,000
Yields expected to achieve between 8 -11%, while economic citizenship is available on certain properties
Indigo Bay, Trinidad and Tobago , is a resort development of studio, single and two-bed apartments from £122,800.
Tobago is a top ‘eco-tourism’ destination and the annualised return on Indigo Bay investment is forecast to be 55%
Bacolet Bay, Grenada , is another resort with a range of studios, apartments and villas costing from £310,000.
As a five-star resort set in 41 acres of tropical gardens, Bacelot Bay comes with all the state-of-the-art facilities you would expect.
Renaissance, Trinidad and Tobago , are large apartments and penthouses ranging in price from £1–2 million.
The Renaissance will have a the highest standards of design, facilities and services that will surpass any development currently in Trinidad and should therefore be in strong demand by the executives working for the ever expanding oil and gas companies arriving in the area.
Don’t expect bargain basement prices in the Caribbean. The islands are a top-end tourist destination, and although the cost of living may be cheaper, land is limited, which keeps prices up.