“Saint Lucia offers equal parts beauty and mystique and captivates anyone who sets foot on its coastline”
Whether hunting for their dream beach house, looking for a reliable investment or planning the perfect retirement hideaway, Caribbean real estate has always been a draw for overseas buyers.
Some islands have been better than others at cultivating this lucrative niche – Turks and Caicos is booming and Barbados is seeing increased interest – but local realtors are optimistic that Saint Lucia will grab a bigger share of the market this year thanks to more liberalised legislation and a post-Brexit confidence among British buyers.
Turks and Caicos hits a high
Last year Turks and Caicos emerged as one of the bright spots in Caribbean real estate, and its popularity is predicted to continue through 2020. Drawing the eye of celebrities, high-net-worth-individuals and investors, the islands are fast becoming a mecca for luxury property hunters.
Villa sales represented just over half the market in 2019, according to Sotheby’s Turks and Caicos, with most of those carrying a price tag of around US$ 1.98mn. In total, the market reached US$ 334.7mn in 2019, bolstered by a strong performance in the luxury niches where 21 properties sold were over the US$ 3mn mark and the highest sale was a US$ 27mn villa.
Ongoing development of residential options, such as the Ritz-Carlton Residences on Grace Bay, Rock House and The Bight Hotel, points to a bright future for the booming market which saw average sales prices increase by 36 per cent last year. In total, sales volume in Turks and Caicos has increased by 568 per cent over the last decade.
The Barbados market is also on the up, after a decade-long slump that saw prices fall substantially. Realty group Terra Caribbean saw sales on the island increase by 22 per cent in the first half of 2019 and notes in a recent report that confidence appears to be returning to the higher end of the market, with more interest in homes valued at US$ 5 mn and above.
Relaxing the regulation
Sarah Danzie, realtor with St. Lucia Sotheby’s International Realty, suggests that Barbados’ liberal legislative environment has played a part in getting the island’s real estate sector back on its feet, saying: “Many islands, such as Barbados, have no restriction on who can own real property. Land can be acquired by residents and non-residents with very little difference in the process. We are optimistic that Saint Lucia will follow suit.”
For Danzie, the biggest challenge in the Saint Lucian market is getting overseas buyers the necessary paperwork to enable them to buy. She says 90 per cent of St. Lucia Sotheby’s clients are foreigners looking for second homes and the cumbersome process means they must wait up to six months to get the required licence. This is set to change, however, with the government currently implementing new legislation that will cut the processing time to two weeks. The new law is expected to take effect within the next six months.
And for buyers lured by the relaxed regulation, there’s likely to be plenty of inventory to choose from as a change in the tax laws is prompting some foreign owners to sell up. Non-nationals have been taking advantage of a provision which allows them to buy property through an offshore company, which means less processing times, minimal resale costs and a tax exemption. However, in January 2019 this law was amended and, from July 2021, these buyers will incur substantial taxes when selling.
“While we are eager to see what the government will do to assist with this hefty tax bill, we now have a huge inventory of properties for sale by non-nationals who are motivated to sell before the July 2021 deadline,” says Danzie. “Buyers have a lot of negotiating power and are looking to move quickly.”
Making the list
Saint Lucia’s high-end market is buoyed by tourists-turned-buyers – visitors from the UK, US and Canada who come for a vacation and fall in love with the island’s natural assets. “With both white and golden sand beaches, magnificent rainforest, soaring mountains and superlative bays, Saint Lucia offers equal parts beauty and mystique and captivates anyone who sets foot on its coastline,” says Danzie. “The island is largely mountainous leaving virtually every property with gorgeous views.”
From the mountains to the beach, owners are always looking for the classic island idyll. Industry site Realtor.com recently released its list of the most affordable beach towns in the Caribbean, and Saint Lucia made the cut.
Rated on home price, crime levels, GDP, real estate regulation and beach quality, the Realtor.com team picked ten top destinations with Tulum in Mexico voted number one and Saint Lucia’s Rodney Bay coming in second. Citing its proximity to Sulphur Springs and Reduit Beach, the already-entrenched expat community and a price per square metre of US$ 1,860 (including buildings), Realtor.com singled out Rodney Bay as a must for American buyers who can snap up a three-bedroom home for US$ 495,000. Other Caribbean towns on Realtor.com’s radar included Playa Bonita in the Dominican Republic, Maracas Bay Village in Trinidad and Tobago, Crane Bay in Barbados and Kittian Village in St Kitts.
Optimistic outlook
Luxury real estate is a competitive market in the Caribbean with every island vying for investor dollars. Danzie believes that Saint Lucia can hold its own in the marketplace with property prices between 40 and 60 per cent lower than on neighbouring islands, and adds: “It is in many ways a buyer’s market. The island offers an excellent opportunity for a high return on investment and it’s one of the world’s top destinations for weddings and honeymoons which makes a holiday rental property highly lucrative.”
Overall, Danzie is hopeful that the sector will see real growth in 2020, particularly following Brexit which has restored some much-needed certainty to the sector. “With the finalization of Brexit, we are seeing increased confidence from Brits and thus a more robust real estate market for Saint Lucia. British who have been holding off on purchasing are now confident in buying.
“We are optimistic. The real estate market has been relatively stagnant over the last two years. However, as of January, we have seen a lot of interest in buying real estate, both by individuals and foreign investors. Things are moving and it is expected to continue in this direction. Inventory is high, demand is solid and continues to grow, and interest rates remain low, making Saint Lucia very attractive.”
