Is it time to look at the Barbados real estate market?
Historically countries such as Barbados have often attracted celebrity property investors and while this trend continues, there is a growing hope that the downward trend in property prices in recent years is coming to an end. A number of property media publications have picked up on the fact that June 2013 saw a surprisingly generous investment with a French-Canadian buyer acquiring Cove Springs, situated on the West Coast, for a $51 million outlay. This caught many property advisers and experts by surprise and, while not necessarily a turning point at the time, looking back perhaps it was exactly that.
If we roll forward a few months we will see that pop sensation Rhianna acquired a £22 million apartment in the One Sandy Lane development – nothing exceptional? Well perhaps the more surprising element of this particular move was the fact that the singer herself had been renting the apartment awaiting the right time to buy. With her raft of advisers and experts perhaps Rhianna has spotted an upturn in the region?
Natural correction
The culture in Barbados is very different to many other areas of the world with the local population on the whole very positive. Indeed when real estate prices started to fall there was a collective view that a natural short-term correction would not harm the market in the longer term. This has proven to be correct and now we see an array of rumours and speculation regarding further large-scale property investments in the region.
Quote from PropertyForum.com : “Property owners in Barbados are reducing their asking prices by more than 10% to attract buyers ahead of the traditional selling season, according to real estate experts in the region.”
We have covered time and time again the fact that sentiment does play a major role in the direction of any real estate market. Whether the generally positive demeanour of those living and investing in Barbados has assisted this recent rally is debatable but where do we go from here?
Currency issues
The Barbados currency is pegged to the US dollar and when you bear in mind that the UK pound has performed admirably of late against the US dollar this has opened a new window of opportunity. There is still a very close connection between the Caribbean and the UK and perhaps this has assisted some UK investors in taking advantage of the currency situation. In simple terms, every $1 million invested in Barbados converted from UK pounds would see an investor $37,000 better off compared to a year ago.
The issue of currency anomalies, whether short, medium or longer term, has given many international real estate investors food for thought.
Special entry permits
In line with the likes of Spain and Portugal, the authorities in Barbados have used special entry permits and potential full citizenship as a means of attracting real estate investors of late. When you also consider the natural recovery in the Barbados real estate market, the potential to gain full citizenship when investing in the region can only be a further attraction. The fact that the area has for many years now been a real estate market for showbiz celebrities should ensure significant coverage in the worldwide media. Possibly to a greater extent than you would expect from a country of its size.
One note of caution, relatively small real estate markets such as that in Barbados can turn very quickly and you need to have your wits about you when investing in the region.