Real Estate Rebound
Credit – Catherine Morris Star Publishing, January 19th, 2019
St Lucia’s real estate sector continues to improve as opportunities emerge for house-hunters. January is a time for New Year’s resolutions and if buying a house is on your list for 2019, you’re in luck, according to Saint Lucia’s realtors who say now is a good time to grab a bargain on your dream home, invest in rental accommodations or simply move up the property ladder. David Farrin, Managing Director at Doubloon Real Estate, says he is “cautiously optimistic” heading into 2019, and adds: “There has been improvement. Last year was one of the better years we have had since the recession [and] the level of enquiries coming in at the start of this year is encouraging.”
Brits create buzz
Doubloon Real Estate caters mostly to foreigners, with around 70% of its business coming from international buyers and sellers, and Farrin notes that the falling British pound has created opportunities for locals, particularly in the middle of the market, around the US$ 500,000 price range. “A lot of British sellers have been able to reduce their prices to make their offer more attractive. That has helped inject some life into the market.”
These properties are particularly attractive to a new breed of buyers — young Saint Lucian professionals who are eager to invest in real estate. “There is a younger generation that is creating a market,” says Farrin. “They are professionals in their mid-30s to mid-40s — bankers, lawyers, accountants. That is a market that is quite strong. As British sellers reduce their prices, these buyers are getting the benefit of considerable reductions.”
And locals are ideal buyers for those sellers interested in securing a quick and easy sale. Transactions like these can close in as little as 5 weeks according to Farrin who says savvy local buyers can get a 15 to 20 per cent reduction from the asking price. “It is a buyer’s market. These properties virtually never sell at the listed price.” His advice for buyers this year is simple, “Look long and hard, and if you want a deal, make sure you have your finances in place.”
Locals may be snapping up deals, but foreign buyers continue to be the bedrock of the sector. Saint Lucia has always been popular with international investors, thanks to its tropical climate, island lifestyle and welcoming, friendly communities. “People fall in love with Saint Lucia,” says Heather Floissac, Managing Director of Belle Vue Properties and President of the Saint Lucia Realtors’ Association. “The natural beauty of this country really appeals to people. They come here and they want to buy.”
But the process for foreign buyers has not always been easy, marred by excessive bureaucracy and lengthy delays. Many international buyers choose to form an International Business Company (IBC) through which they can purchase property, but this option is no longer available following a clampdown led by the Organisation of Economic Cooperation and Development. “Buyers are not allowed to form IBCs to buy property anymore and that will affect all islands,” says Floissac who is currently working with government on behalf of the Realtors’ Association to find a better way to service foreign buyers.
The government is consulting with the sector as it prepares to review and revise the Aliens Landholding Licence, and examine proposed changes to the current residency regime. Farrin says: “There is some confusion in the market; the government is going to change the rules and regulations of buying and we are wanting some clarity on that.”
Proposals on the table include a residency programme that would come into effect when foreign buyers pay a residency fee. This would give investors more freedom and flexibility, allowing them to live in the country for as long as they wish, rather than the usual 42 days provided under a visitor’s visa.
Floissac welcomes these changes and praises the government for taking a proactive and collaborative approach, saying: “They are very responsive and very open. The government wants to hear from us and they like the feedback.”
New Year predictions
Certainty is good for business and as government looks at relaxing the rules, there are many reasons for realtors to celebrate the New Year. At the moment, most movement is in the north of the island where the infrastructure is more developed. Farrin has noted particular interest in Cap Estate where Doubloon has a number of properties including the US$ 650,000 Hummingbird Villa, a 3-bed, 3-bath, residence with stunning views, and Sea Breeze Villa, priced at just over US$ 1 million, which comes with a one-bed guest cottage. At a lower price point is the Marina Village at Marigot Bay, where a 2-bed apartment is listed at US$ 325,000.
Farrin expects the buzz around the north to continue through 2019, but predicts that interest will shift south in the future, spurred by development in Vieux Fort where plans include expansion of the Hewanorra International Airport, a new cruise port, more retail and restaurant facilities and the US$ 2.6 billion Pearl of the Caribbean project. “There’s going to be enormous investment in the south over the next 10 years,” he says. “If that comes to fruition, it will change the island dramatically.”
Floissac agrees, and says she is encouraged by the scale of investment. “There is a lot happening and the signs are good. With all these new projects coming on stream the government is making a concerted effort to improve the economy. The new airport will allow more travel and more people coming to the island. There are more and more villas being built, there is no stopping it.”
As development ramps up and momentum builds within the sector, Floissac is focused on improving its professionals during her second term as President of the Realtors’ Association. Under her leadership the group, which has around 40 members and is steadily growing, works closely with local colleges to offer training courses. A sure sign of a healthy industry is the level of interest it generates among the next generation and, according to Floissac, there are many young Saint Lucians who want to build a career as a realtor. “There is so much interest now in real estate as a profession. We are seeing so much enthusiasm.”