BARBADOS REAL ESTATE IN FOCUS - IS THIS THE BEST TIME TO BUY?
Clarence Hiles-Barbados Property News-April 2012
While property sales are well short of pre-2008 figures there is enough increasing activity in the market to suggest buyers are slowly coming back to the table. This is a positive sign and while interest doesn’t guarantee sales, it has to start somewhere to get the ball rolling.
There are two types of real estate buyers in the Barbados market and they represent two very different interests. Local buyers are essentially buying a lifestyle, a home that they like and where they intend to live with their family possibly all their lives. Overseas buyers are also motivated by our unique lifestyle, but they essentially want investment gain and if that doesn’t come from rental returns then it has to be reflected in appreciation as values increase in later years.
In both cases buyers will want value for money, a concept that has been much in vogue in recent times as the market has been turned upside down by world recession. But the biggest dilemma for would-be buyers remains the same-has the market bottomed out and is this the best time to buy?
It would be a brave pundit to predict anything in business today given the unprecedented global demise of banks, real estate values, tycoons, and financial services providers over the past four years. White collar deception and in some cases crime, has shattered the confidence of investors worldwide, and it is a much more diligent property buyer that is coming to the table in 2012. That may be more apparent as an overseas buyer given their geographical distance from the purchase and their investment expectations, but inadvertently it has also opened doors of buying opportunity that were not available pre-2008. Local buyers as well as overseas buyers can enjoy these advantageous market conditions.
Markets adapt to prevailing conditions and the buying skill in real estate cycles is to purchase before the market moves upward again. There are no neon signs highlighting the right time to act, so it has to be a business decision based on evidence at source. There is no doubt a lot more vendors and developers have lowered their sales expectations as the soft market continues into its fifth year in succession, and that real estate agents are educating their clients on the noble art of negotiation, a business practice that seemed to have bypassed the local real estate industry until recent times. Also, for their part the pragmatic real estate agents have lowered their sales commission structure to help the sales process and take cognizance of the current climate. So if sellers are reducing their prices and agents have reduced their sales commission, it seems an ideal time to buy. The skill remains in knowing when the conditions have reached their optimum to get the maximum benefit, and inevitably some buyers will miss the boat because they are greedy and wait too long. This is particularly significant with developments because a developer may offer big discounts to shift enough property to ease any financial pressure from lenders or shareholders, but irrespective of market trends, that option will not be long-term as return on investment objectives need to be satisfied later.
The real estate market may smack of uncertainty, but given the scale of global meltdown and how it slowly filtered into to the Caribbean, it isn’t going to rectify and settle overnight so a buying decision will remain a calculated risk. However, Barbados offers a wonderful lifestyle in an idyllic setting, real estate throughout the island is still of the highest quality and social and economic attributes are well proven over many years.When you assess everything in this context, the prevailing conditions are very much in favour of the buyer at this time.
|©2002-2019 Caribbean Mortgage Services Ltd.
Designed and developed by WebDev Designs