[dropcap]S[/dropcap]till in recovery following the global financial crisis, Saint Lucia’s property sector is climbing out of its slump, with growth at the middle of the market.
If you are looking to purchase property in Saint Lucia, now is the time. That’s the message from the island’s realtors who say it’s a buyer’s market and predict slow but steady growth going forward.
When the world’s financial markets tumbled into a recession in 2008, the Caribbean real estate industry took a significant hit. Plummeting investor confidence caused a sharp decline in sales and the sector has been struggling to recover ever since. Now, however, Saint Lucia’s property portfolio is seeing movement, especially in its mid-level inventory, leading many realtors to express optimism about the market’s future.
“It is not the greatest time [for the real estate sector] but there is potential,” says Donnelly John, Sales and Marketing Co-Director at Blue Reef Real Estate. “It is a good time to take advantage of all-time low prices – sometimes 15 to 25 per cent off the listing price. We only see growth from here.”
Saint Lucia is the second fastest growing tourism destination in the region, according to the Caribbean Tourism Organization. Visitor arrivals grew by 14.5 per cent between January and August this year and officials expect the numbers will continue to rise for the upcoming winter season.
Given that many buyers start out as visitors, a booming tourism industry is good news for realtors. Newcomers to the island often arrive for a short vacation, expecting to spend a few weeks on a sun lounger and move on. Instead they fall in love with the country’s charms – its beautiful, tropical environment and warm, welcoming atmosphere. For these tourists, a few weeks a year in paradise is not enough.
David Farrin, Managing Director at Doubloon Real Estate, says the growth in visitor numbers is very encouraging: “The more people that come to the island, the more people that fall in love with the island. And the more people that fall in love with the island, the more people who want to buy.”
And he should know – Farrin first arrived in Saint Lucia over a decade ago, intending to stay just a few months. He has now been a resident and realtor for 14 years and, in that time, has seen the sector slump. “The market has been very depressed since the 2008/2009 recession,” Farrin says but adds that there is interest emerging around the US$500,000 pricepoint. “This is the best it has been in seven years. We’re seeing growth around the $500,000 market; it is quite active at that price range.”
Doubloon’s portfolio includes a US$450,000 townhouse in Belle Vue with three bedrooms, and a US$575,000 waterfront condo in a gated community. Both properties are close to Rodney Bay – a popular area for home-hunters thanks to its proliferation of bars, restaurants and shops, as well as its proximity to the beautiful Reduit Beach.
At Blue Reef Real Estate they are also seeing interest in the mid-range homes, particularly around the US$350,000 mark. “We have continuous growth around that price,” says John who adds he has noted a lot of interest from the Canadian and US market recently.
Farrin, who deals primarily with buyers from the UK, Canada and America, says most property-hunters are looking for a second home – either to rent out or to enjoy themselves throughout the year. “There is a generation of 40- to 50-year-olds coming through now who have more leisure time and want to invest in a second home. They want a place they can lock up, go away and then come back to when they want. Properties in Saint Lucia fit that bill. Saint Lucia does not disappoint. People are friendly and helpful and it is a very beautiful island.”
John agrees and says Saint Lucia stays ahead of its Caribbean competitors by capitalising on its environmental assets. “Saint Lucia is known for its natural beauty, its landscape. The views from most of the properties here are outstanding and there’s lots to do in terms of nature and eco-tourism. People who are seeking that kind of experience can get it here.
“It does check a lot of boxes on what most people are looking for when they imagine living on a Caribbean island.”
From the very first phone call to the sale’s completion, Farrin says it can take up to six months for a foreign buyer to acquire property. If buying from a private corporation, the sale can close much quicker – taking around six weeks – but private purchases can drag on. Foreign investors must obtain an Alien’s Landholding License which can slow down the process. “The time it takes varies dramatically [and] buyers can get very frustrated,” says Farrin. “The legal system is pretty straightforward; there is nothing to be wary of but it is time-consuming.”
Time-consuming but worth it. Most foreign buyers love life in Saint Lucia and become committed members of the island community. Farrin says he’s had very positive feedback from buyers throughout his career, with the most satisfied customers becoming friends. “We have a high percentage of clients who have become personal friends and when they visit we will go out with them, play golf, have a meal.”
Some foreign buyers want to be more than just seasonal visitors. Under Saint Lucia’s Citizenship by Investment Programme, foreign investors can obtain a Saint Lucian passport through a number of means including a minimum US$100,000 donation to the National Economic Fund or a $300,000 investment in a real estate project. This is a major sweetener for some buyers, according to John who says: “Saint Lucia has very attractive residency and citizenship programmes and that creates interest.”
Saint Lucia saw an upswing in tourism and construction activity in 2017. The US$2.6bn Pearl of the Caribbean mega-resort was officially launched, Ritz-Carlton signed an agreement to open a 180-room hotel in Vieux Fort, Sandals released plans for its fourth property on the island and the Hilton Curio said it would develop a new 180-room property in Rodney Bay. This recent buzz has given realtors hope and, heading into 2018, the sector is cautiously upbeat.
“There is a lot of investor interest for projects that have been on pause or for new projects [and] there is land being sold to developers or people who plan to develop,” says John. “That is always going to generate new interest in real estate.” The veteran realtor also wants to see more developers plugging the gap in the higher end of the market – providing inventory for high net worth buyers who are seeking passports along with their properties.
In the meantime, the middle market is where most are focussing their efforts. “I’m not so sure that anything dramatic is going to happen over the next few years [but] there is every reason to think the US$500,000 market will continue to grow,” says Farrin.
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