Strong demand for Barbados’ high-end housing

Barbados’ luxury property market is making a rapid rebound as global travel gathers momentum, operators of one of the island’s leading real estate firms are reporting.

At the same time, officials of the Terra Caribbean Group are calling for the removal of “frictions” they say were preventing the island from attracting even more investment in that segment of the real estate market.

Chief Executive Officer of the Terra Caribbean Group Senator Andrew Mallalieu said the last 12 months saw a significant improvement in the number of transactions in the foreign luxury market, a trend he said they expect to continue.

He explained that while supply continued to outweigh demand for land, there was a general pent-up demand for completed homes at the lower, middle income and upper income levels.

“However, the market that really is driven by the tourism and global factors is the high-end luxury market . . . That market has significantly improved,” said Mallalieu, who indicated that some properties were being sold at full asking price while a few were being slightly discounted.

Speaking on Monday during a virtual launch of the company’s one-stop-shop website www.terrared.com, which is designed to be a real estate information hub for individuals to keep abreast of the latest real estate trends, and engage with investors and real estate experts, Senator Mallalieu said, “The empirical data tells us that the market is hardening – the period of time that the properties remain on the market is short and the offer prices are almost at full value. We think that is going to translate very quickly into growth in prices. It is a great time to buy at that high-end market if you can participate in that.”

He said some of the main reasons behind this were Barbados’ location, economic and political stability, the management of the COVID-19 pandemic, as well as the increase in global wealth among individuals who were simply looking for available investment options.

Meanwhile, Hayden Hutton, Chief Operating Officer of Terra Caribbean, pointed out that long-term property rentals have doubled since 2019, due mainly to the Government-led Barbados Welcome Stamp initiative. He said as a result of this initiative, some well-to-do individuals have made the “strategic decision” to purchase a property here.

“The other is that people are sitting on cash and realizing that in a post pandemic world it is only going to do so much if you put it in the bank, crypto is no fun and NFT [non-fungible token- a form of digital ledger that can be sold and traded] is not as much fun as owning a luxury villa on the west coast of Barbados. So that is one to watch. There is no question that the luxury market on the island is really on a trajectory like nothing we have seen before,” he said.

“Coming off the tail end of the pandemic Barbados brand is probably stronger than it has ever been.”

“We see it every day with probably the highest real estate sales metrics in our own business than we have seen in history,” he stressed.

“The good news is that it certainly seems the real estate market and travel market are recovering well ahead of perhaps the more orthodox predictions. Indications are for a record winter season (in the high-end market). If you are to try and book a flagship villa on the west coast of Barbados now in season . . . you would probably struggle,” he said.

However, the real estate officials identified several factors they said could impact the pace of recovery including increased construction costs, another COVID-19 variant that would result in a shutdown, continued disruptions
in the supply chain, and an increase in violence.

Mallalieu also pointed to the need for a removal of “frictions” that were “slowing us down and not adding value”.

“Maybe the best thing is to say to everyone ‘this is what the market is. We don’t have all these various taxes on there that prohibit you from investing’, and remove that friction so that we are known to be open to the market,” said Mallalieu.

He also suggested that the legal and banking processes frictions were responsible for some unnecessary delays.

“With good market data, the right environment that facilitates investment, I think we are in a very good shape for substantial growth certainly over the next 12 to 24 months as travel returns to full capacity,” said Mallalieu, who indicated that Terra Caribbean believed the recovery of the tourism industry will be faster than some economists were predicting.

They were speaking on Monday during a virtual launch of the company’s one-stop-shop website www.terrared.com, which is designed to be a real estate information hub for individuals to keep abreast of the latest real estate trends, and engage with investors and real estate experts so they are better able to make informed decisions on property sales and purchases in Barbados and the region. marlonmadden@barbadostoday.bb