IT FEELS wrong to be delighted by the financial crisis, doesn’t it? But if you were reclining on a sun-lounger in 30°C heat with a sparkling ocean stretching out in front of you, it would be difficult not to. Especially if you had managed to buy a Caribbean dream home on the cheap. The numbers of these smug people are growing because the financial crisis lopped an average of 20 per cent off property prices across the Caribbean. But with depressed property prices comes a degree of risk and buyers need to consider carefully the various islands' potential before taking the plunge.
Indeed, Julian Cunningham of Knight Frank’s international department explains that most are shopping safe by sticking to the most established islands such as Barbados. “Three and a half years ago people were more adventurous, buying in less densely populated places like Dominica and St. Martin. Now they want to be able to see their exit strategy before they buy, just in case.”
But the real bargains are outside of Barbados. In Nevis, for instance, a luxury property can be $2.5m cheaper than in Barbados. Certainly, a risk worth taking now that the financial crisis is underway and prices are beginning to recover.
But which island is most likely to pay off? “Any island with direct international flights will do well,” says Cunningham. The Caymans, for example, has direct flights to both the UK and Miami. It also benefits from extremely low taxes – a major pull considering the rising taxes in the UK and US. St. Lucia is also a good choice. It’s cheaper than Barbados, more popular than Dominica and has none of the financial scandals that rocked Antigua a couple of years back. The island is experiencing growing commercial interest. Developments such as Sugar Beach have poured in millions to build luxury properties on the coast of the Caribbean Sea.
But what are the experts tipping? Cunningham says Grenada is his “wild card” because it had only just entered the mainstream property market prior to the crash, yet the prices have fallen 10-5 per cent further than its more established rivals. “My bets are on it making a come back,” says Cunningham.
Prices may be low but confidence is growing, so the window of this bargain opportunity might be short-lived. Those bold enough to take the plunge on an island property outside of Barbados could reap the benefits when prices take off again.
VICEROY RESIDENCES, ANGUILLA
These recently opened contemporary-style villas had their interiors styled by Beverley Hills design celeb Kelly Wearstler. The 166 residences range from studio apartments to penthouses. Some have private beaches. The development is surrounded by 35 acres of land.
Contact: Hamptons International on 020 7758 8488
SUGAR BEACH, ST. LUCIA
These soon-to-opened residences will offer private swimming pools with natural stone or whitewashed greenheart timber deck, depending on the setting. Some of the bedrooms will have private balconies.
Contact Sugar Beach on 084 4921 0126
WINDSWEPT VILLAS, ST. KITTS
These villas are based on the least populated island in the Caribbean. The development offers 11 apartments with three to four bedrooms on the harbours side.
Contact Aylesford International on 020 7349 5100
CARIBBEAN FINANCE FACTS
Caribbean banks never really offered particularly generous mortgages even before the crisis. So if you’re interested in buying be sure that you have at least a 30-40 per cent deposit available. Most people purchase their property in cash.
If you know that you will be selling your property in the near future, beware that experts have noticed that property sells more easily when the dollar ranges between $1.5-$1.6 to the pound. Important to bear in mind as the next few years could see considerable fluctuations.
While taxes are extremely low in the Cayman Islands there are a few taxes that can hit the unprepared hard. The tax imposed on importing a car, for instance, is calculated from the cost of the car plus the insurance premium with a special tax for those with SUVs.