ll October - December 2008 lime 55 of the economic downturn around the world. But will it continue? Judith Baker reports.
business 56 lime October - December 2008 W hilst the property markets in North America and the United Kingdom are now seeing significant falls in values, the Caribbean market is still a great choice for investment," Stewart Andrews, managing director of Caribbean Land and Property tells me. " Presently the hottest spots in the Caribbean include Dominica and the Dominican Republic, where prices are still very affordable. Many properties in these countries have doubled in value over the last year. As their prices still have a long way to catch up with surrounding islands, the outlook for investors in these countries remains bright for the foreseeable future." The Caribbean is a gem in the current market, agrees developer David Farrin of Doubloon Estates, who claims the region is holding its own. At the high end of the business in St Lucia, where he operates, the strength is in the $ 800,000+ bracket, with no signs of an imminent downturn. With government pro- active in tourism, prices should continue to do well, making it a soft landing as far as property markets are concerned. Michael Richings, another property developer on St Lucia, claims that the market on the island is buoyant, with growth of 100- 150% over the last five years and no signs of the downturn experienced elsewhere. " Rental returns are higher than the US, making St Lucia a high yield place to be," he says. Properties at the higher end of the market are being snapped up by British, French and Irish buyers, as well as business people from the island itself. But those concerned about over-development can rest assured that new projects such as Allamanda at Anse Galet on St Lucia, in which Richings is involved, are scrutinised closely by the government to ensure they adhere to strict environmental controls and include a high percentage of green land on site. " Places like St Vincent and Grenadines represent great value for money compared to other ' tropical paradise' retirement destinations," says portfolio strategist Deanne Dukhan of Experience International. " For less than a comparable property in Nicaragua or Panama, many of the Caribbean islands offer a pristine paradise and lifestyle with low crime rates. " The Caribbean is a region internationally renowned and acknowledged as not only a beautiful destination, but a sophisticated one as well. Islands like the Dominican Republic, " previously known mostly for budget all- inclusive deals, now host some of the most exclusive resorts in the world. The investment implications are obvious, as this trend continues leading to higher pricing levels in areas that experience increasing numbers of affluent visitors." Emma Holifield of international investment specialist Property Frontiers, adds: " Recent developments in infrastructure, plus a diversification in the kind of real estate on offer, means that the Caribbean has blossomed into a thriving investment market with high rental returns based on the region's year- round season... Mortgages of up to 70% loan to value are available and there are low property and capital gains taxes on most of the islands. As a result, Caribbean property prices are rising at rates of at least 10% a year." The less developed islands are getting talked about not only for their unspoilt beauty and lifestyle but for the exceptional investment opportunities they offer. Although prices on islands such as Grenada, St Kitts and Tobago remain low by regional standards they are likely to creep upwards in line with each country's increasing popularity. It is here that the potential to achieve high capital gains arises, especially for those who get in quickly. With the US dollar currently weak against the pound and the euro, it is expected that the market for second home real estate should continue to be strong for potential European buyers. Guy Gittens, sales director for British entrepreneur Peter de Savary, is upbeat about Grenada's future and says he sees the island returning to its heyday of the 1940s and ' 50s when it was an affluent sailing location attracting the glitterati of the day. Today the country is drawing investors from the UK, the US and Canada as well as JCBs ( Just Come Back) – Grenadians returning from around the world. At Mount Cinnamon, one of the properties owned by de Savary on Grenada, all of the Phase 1 units have been sold. Gittens says Grenada has benefited from the government's ' less is more' policy towards development, granting concessions with care to ensure slow growth over a period of time to preserve the island's natural charm. Tobago is popular with German property buyers and divers from all over the world. The government is committed to a restricted and sustainable programme to control and enhance the tourism industry, making this a popular eco-destination for the discerning traveller. Although values are rising, the average price for coastal properties is still less than most other islands. Last year's Cricket World Cup helped improve the infrastructure and services on islands such as St Kitts and Nevis. Relatively under- developed compared to other Caribbean countries, St Kitts has a young property market. Sellers have been waiting for prices to increase and so market development has been slow. However, the pace of development has been increased by the arrival of certain big names in the hotel and property development worlds, and a favourable tax regime which make them appealing to the foreign investor. Good news, then, if you're looking for a secure property investment. It looks as if the sun will continue to shine on the Caribbean property market for the foreseeable future.