Barbados has long been held up as a beacon of stability in the Caribbean and this holds true for the property market.Â From the inception of Sandy Lane Estate in the 1960’s to the myriad of second home communities presently on offer, prices have never fallen and the love affair between holiday home purchasers and the island continues unabated.Â Indeed the last ten years have seen unprecedented growth in both supply and demand.Â From a base of around 500 vacation homes ten years ago to 3,000 homes in the near future the property market has become very important to the nation’s economy.
Of course the growth of the second home market is a global phenomenon.Â The growth of the world’s economies, the baby boomer generation, ease of credit and increased leisure time are all credited as major stimuli, but the Barbados story is a special one.Â Many credit the development growth spurt to the introduction of a scheduled Concorde service to the island in the early 1990’s.Â This was followed soon after by the development of Royal Westmoreland, a golf community, and Port St Charles, a marina development, both of which set new standards of luxury for the discerning buyer.Â The Concorde factor just made it much easier to get to the home of choice.Â A strong pound and low interest rates set the scene for the “British invasionâ€ and to this day 75% of buyers are from the UK.
All of a sudden Barbados was on the map for second home communities.Â The re-development and expansion of the world famous Sandy Lane with the addition of two new Tom Fazio golf courses continued to increase Barbados’ profile.Â Recently the staging of our two world cups, Golf and Cricket, added to the allure of the island.Â Added to that, the introduction of Four Seasons and Banyan Tree residences can only enhance the island’s reputation as a world-class vacation home destination.
So why Barbados?
Quality of Life
Most people’s choice to buy a second home is driven by their desire to live in a more relaxing environment than their normal domicile.Â Barbados delivers first world services and recreations but in a gentile, tranquil setting without the hustle and bustle of modern every day life.
Consider these reasons:
- Year round warm climate
- Friendly and welcoming people
- Low crime rate
- A robust, mature economy
- A stable, democratic government
- World class amenities — golf, polo, marina, shopping, award winning restaurants
- Stunning coral sand beaches and turquoise sea
Finally the “to doâ€ factor.Â There is just lot’s more to do in Barbados – great sailing, top class museums, annual events like Holders Season and the Jazz Festival, horse racing and polo on one of three new fields.
Government Commitment to the Sector
Barbados is a property owning democracy and the government welcomes developers and buyers alike with open arms.Â Generous financial and tax concessions await the developer with a sound plan.Â The new Tourism Development Act grants duty concessions and accelerated tax write offs for approved projects. The government is also tackling the thorny issue of land use and planning regulations and is doing so in the spirit of continuing to enable development.Â The Prime Minister continually endorses the development of second homes in Barbados in public and fast tracks key developments.
Government’s commitment to the island infrastructure has never been more evident.Â The island’s International Airport has just been completely renovated, the main highways are being enlarged to four lanes and the world famous Kensington Oval was completely rebuilt for the world cup.
But most importantly the stability of this island’s democratic government compared to others in the region is undisputed.
Barbados has had a robust tourism sector for over 40 years and 20% of the labour force is directly or indirectly employed in this sector. For the second home buyer, finding the right management or rental company is not difficult and from the butler to the maid, training in service is instilled.
The introduction of Four Seasons, Banyan Tree and soon Fairmont and Rosewood, will bring with them the highest quality resort services extended to homeowners. Fairmont is already in Barbados and are planning a condominium development
Many of the top real estate companies on the island run rental programs and manage condominiums and home owner associations which give comfort to the second home buyer.
Ease of Buying in Barbados
Barbados has created a very investor friendly environment for foreign nationals wanting to invest their money.Â No other Caribbean destination can boast of a combination of no entry taxes, minimal exit taxes, no alien landholding license requirements, widely available foreign currency mortgages and high quality legal services based on UK conveyancing.
In 2007 the government reduced Property Transfer Tax from 7.5% to 2.5%.Â The government is also presently working on eliminating the exchange control restrictions on the repatriation of funds on the sale of homes.Â There are no capital gains taxes in Barbados so the repatriation in full of the proceeds of a successful investment in a second home with minimal taxes is now a reality.
As mentioned previously, most of the vacation home buyers are UK residents and the Chancellor of the Exchequer announced in his 2007 budget speech that he will introduce legislation to eliminate taxes on the ownership of foreign homes through special purpose vehicles for UK residents.Â With the strong value of the Sterling and the Euro, the value proposition has never been better.
Security of Investment
Barbados has never experienced a fall in the average value of second homes.Â There have been times when the numbers of buyers have declined but this has never forced a decline to below the original value.Â In the last five years, the boom in the second home market has been at least as great as competing destinations.Â Prices of up to US$1,500 per square foot have been achieved for condominium sales and beachfront land prices have reached US$400 per square foot.
Capital appreciation in many of the major communities has been very strong.Â In the last ten years the pattern of gain has been consistent across the successful communities.Â Examples of annualized gains are as follows:
Annual Capital Gain
|Port St Charles||Condominium||23%|
I have mentioned 5 good reasons to invest in property in Barbados but there are many more.Â The combination of the value proposition and the quality of life are compelling reasons to invest here. Why buy anywhere else.