A recent survey of the real estate market in Barbados shows the majority believe property prices are way too high, and buyers prefer to purchase houses already built rather than going through the headaches that come with construction.
Terra Caribbean, which has just released its Red Book, the annual publication on what’s happening in the local realty market and future trends, said its survey of market sentiment has uncovered a return of confidence to the sector during 2019.
However, Hayden Hutton, Terra Caribbean’s chief operating officer said while the sentiment was positive among survey participants, there was still a five per cent drop in property sales on the island last year compared to a near eight per cent rise in 2018.
Hutton said there was a near 80 per cent increase in respondents who had a favourable view of the Barbados market in 2019, compared to 2017 when the last survey was conducted.
The survey also uncovered some sentiment on matters such as property prices, construction costs, and the controversial issue of beach front development.
Asked their views on real estate prices, 60 per cent felt properties were overpriced whether it was the cost of vacant land or land and house combinations.
When it came to the cost of construction on the island, an overwhelming 82 per cent felt these costs were over the top. And the Terra senior executive assessed this was also reflected in the preference of buyers for already constructed homes rather than facing the problems associated with managing new construction.
While 57 per cent preferred to buy a property, just 26 per cent preferred to build. Some 17 per cent said it made no difference to them. “This points to buying as a better option until such time as there is a reduction in construction costs or the market begins to grow,” Hutton noted.
Beachfront properties in Barbados can often fetch millions of dollars, but the overwhelming sentiment in the market is for these developments to go no higher than four storeys.
“Building heights continue to be a hot button issue with over 90 per cent of respondents indicating a preference for less than ten storeys. The proposed redevelopment of the Blue Horizon Hotel at Accra and the construction of a new Hyatt Ziva at Carlisle Bay have once again brought the issue to the forefront,” the Terra official pointed out.
Asked to rank which areas of the market required greatest reform, the top concerns were banking and mortgages with 54 per cent, next was legal services with 49 per cent, followed by construction with 28 per cent, then real estate agencies with 20 per cent calling for reform in this area.