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Price Increases Inevitable In Caribbean Property Market
February 17, 2010Article by Ray Withers
Caribbean property could see prices increase by a regional average of up to 5%, international property investment consultancy Property Frontiers has announced. The firm says that as international buyers return and tourism climbs back onto its feet developers will seize the opportunity to start reversing any discounts or price falls from as early as April.
“Overseas property sales have been increasing since last April, and the Caribbean has seen among the fastest growth in sales volumes. This is because lifestyle buyers, mostly wealthy ones have been predominant in the market, and the Caribbean is the ultimate lifestyle choice,” said David Cox director of the firm.
“Lifestyle buyers had kept the Caribbean markets going anyway, so prices didn’t have to come down in most places. This leaves developers well placed to capitalise on the increasing demand to increase their turnover,” he added.
As Cox said property prices have largely held firm across the Caribbean, but what we have seen is developers reducing the level of luxury; removing things like moorings and spas in order that they could offer their properties at lower prices without necessarily reducing their profit margins.
So that is likely the first thing we will see in terms of price rises; not percentile rises to beat inflation or increase profits, but properties of higher value being sold at higher prices.
Never the less, a higher price is a higher price, and, depending on how heavily buyers weigh the optional added extras on an individual basis, for many the time to buy is soon to beat these rises.
One could argue that the kind of wealthy buyer looking at Caribbean property would pay the extra in order to maximise the luxury. But if that were true then we wouldn’t have seen sales increase so rapidly once developers started cutting back on the luxury.
But on the other hand, it is hardly a coincidence that sales only started increasing after the first signs of international recovery emerged. This is when all those in the world who were wealthy enough (or fortunate enough) to have avoided any real or direct effect from the crisis breathed a great sigh of relief, when they knew that now the probably wouldn’t be affected at all.
It is entirely possible that the spike in sales of Caribbean property had nothing to do with the removal of luxuries, but was simply a massive surge in relieved rich people treating themselves to a property in paradise.
Either way, the sales increase happened, and looks like being built upon as we progress into 2010. Price increases are the only logical choice for Caribbean developers.
For more information contact Property Frontiers on +44 (0) 1865 202700.