Confirming what many had already suspected, a senior executive with a noted real estate firm in the United States said the Caribbean real estate market for American buyers is strong and is getting stronger.
“Purchasing properties in the Caribbean could be a good hedge against a domestic market that is slowing down,” said Richard Cardenas, vice president and regional director of RE/MAX for the Caribbean and Central America.
“Property values are low in many areas, but they are appreciating rapidly, so a relatively small investment can yield good returns,” he added.
The Bahamas Real Estate Association had already confirmed that real estate locally is a hot commodity for second homebuyers in particular, especially those who are seeking tax breaks.
The government has embarked upon a study to evaluate the impact of the second home market on the economy, particularly on islands like New Providence, Exuma and Abaco where the sector is doing extremely well.
Mr. Cardenas called second home purchasing in the Caribbean region a relatively low risk process.
“There are few legal limitations on Americans buying homes,” he said. “If you plan to use a second property for short vacations, up to 30 days, typically no visa is required. Many islands have a U.S. or British title system and there are no restrictions on full ownership.
“In Honduras, for example, you can purchase up to three quarters of an acre of land in your own name without forming a corporation.
“Many people think of the Caribbean as the string of islands running from Florida all the way to Venezuela, but Central America also has a Caribbean coast and prices are generally lower there. You can find some surprisingly affordable homes in Panama, Costa Rica and the Bay Islands in Honduras.”
Mr. Cardenas identified the growing markets in the region as Turks and Caicos, Belize, Grenada, St. Croix, St Kitts and Nevis, St. Vincent and the Grenadines and the Dominican Republic.
“These areas are less travelled and have less infrastructure, but attractive prices ranging from $200 to $500 per square foot,” he said.
He identified mature and pricier markets as Cayman Islands, St. John in the U.S. Virgin Islands, Puerto Rico and Jamaica, saying that tourism is well established in these areas and five star hotels and other amenities can easily be found.
High-end properties in the Caribbean range from the high six figures to as high as $40 million.
Real estate in The Bahamas is viewed as an especially hot commodity, particularly by foreign residents who are enamoured with what they perceive to be Paradise.
Investing as much as half a million dollars in a home here guarantees permanent residency status.
For others, the purchase of a second home is used as a tax break.
Paradise Island, near the exclusive Atlantis Resort, Grand Bahama, Exuma, Abaco and Eleuthera are prime locations, ranging from the dainty bungalows that line the waterfront to other lavish homesteads.
But in some situations, small hotel operators in the Family Islands have expressed concerns about second homes sometimes being rented out, posing direct competition with their businesses.
The government is pondering whether to make changes that would require certain government fees or taxes to be paid in that regard. It is also beginning to revise its entire land administration policy.
Prime Minister Perry Christie has conceded that the government has to be very meticulous in its planning of second homes.
He enthusiastically referred to the sector’s potential to help spur economic diversification.
A year after the prime minister created the Ministry of Financial Services and Investments, which has the ministerial portfolio for second homes, the minister reported in a national address that the sector had flourished to the benefit of Bahamian realtors and contractors.
Government officials have acknowledged that international landholding investments in second homes, vacation cottages and commercial ventures continue to foster economic growth and sustainable development in The Bahamas.
The President of the Bahamas Real Estate Association Pat Strachan has told the Bahama Journal that Abaco has the strongest market for second home purchases.
The Bahama Journal
