Property Market in Barbados
How has the Property Market in Barbados faired during the recent economic slowdown?
Despite over 40 years of independence, Barbados is today still considered to be the ‘Little England’ of the Caribbean, as the island remains exceedingly British. The Queen of England remains head of state, cricket is a national obsession, polo is played throughout the winter months, and afternoon tea is customary.
The country offers a number of striking sandy beaches, warm sunshine and turquoise waters, but unlike some other islands in the Caribbean, Barbados is neither unspoilt nor remote.
Instead the country has one of the most mature tourism infrastructures in the Caribbean and presents some of the highest quality living on the planet. The island is filled with a range of luxury residential resorts, fine bars, eateries, duty-free shops as well as a number of lively nightclubs, including the popular tourist area of St Lawrence Gap. It also boasts alluring Barbados property for sale.
The country has experienced somewhat of a construction boom over the past fifteen years, including many new Barbados properties, particularly since 2004, when it was announced that Barbados would host the 2007 Cricket World Cup Final, which boosted demand for Barbados villas and properties.
The greatest international demand for property in Barbados unquestionably comes from the UK. But Tim Morgan, managing director, Cluttons Resorts, reports that there is also interest coming from the USA, Canada, and some other Caribbean islands, particularly Trinidad.
Despite the global economic slowdown, Morgan reports that the Barbados property market has faired better than most other islands in the region, and as a consequence of her strong brand, properties for sale in Barbados are still selling, albeit at a slower pace of growth.
Morgan comments: “History has shown that during harder financial times and even recessions, Barbados properties are affected for the shortest period only whilst people are uncertain and decide not to make a decision. Then as people start to make sense of things and even become fed up, they tend to want to be in Barbados and buy a property.”
Although the UK pound has weakened significantly against the Barbados dollar – linked to the US Dollar – over the past year or so, further increasing the cost of buying property on the island for Britons, “there are still good deals to be had when buying Barbados property,” says Morgan.
Property prices across the island vary enormously. Demand is generally greatest along the west coast, where property prices for Barbados villas, houses and apartments tend to be the most expensive on the island. A one-bedroom property located in the Port of St Charles can typically cost around £50,000 to buy, while a three-bedroom villa in and around the Parish of St James can cost up to £4.5 million.
Cheaper homes can typically be found in the south eastern Parishes of St Phillips, St Peters, and Christchurch.
Buy-to-let investors looking for property in Barbados and who intend to target the tourist market should typically be able to yield an average annual rental return of around 5 per cent. However, investors who let out property should also focus on trying to achieve capital growth.
It is widely claimed that in the recorded history of the property market in Barbados, property values have never fallen.
In fact, the latest Cluttons market report states that Barbados property prices are still appreciating at an annual rate of 10 to 15 per cent at the middle of the market and often higher at the luxury end, despite the credit crunch.
For buyers who are purchasing property in Barbados, foreigners can currently obtain a mortgage of up to 70 per cent loan-to-value, while total Barbodos property purchasing costs amount to around 2 per cent of the property’s value.
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