Investment in the caribbean is taking off this year as holiday traffic to the Caribbean is increasing and the investor environment in the area is becoming more favourable: a double advantage for buyers.
The Caribbean has long been a favoured destination for Americans, and throughout the last couple of decades Europeans have caught on too, and the region is now a very mature tourist destination offering everything from classic sun, sea and sand vacations to more specialized eco-tourism, luxury spas and it’s one of the world’s top destinations for honeymoons.
It’s that tourism trade that underpins investment in the Caribbean increasing its overall appeal as an investment location. In fact, one of the most significant trends in property investment over the last few years has been the growth in dual citizenship opportunities and tax advantages in the Caribbean. St. Kitts, Dominica, Belize and Barbados have already implemented these and they are soon to be joined by Grenada and Antigua.
Knight Frank’s Caribbean Prime Residential Insight report 2014 said the number of prime sales rose by 10% to 15% in Barbados and the British Virgin islands. While prime sales are rising, sales in lower price brackets are following suit and prices are stabilizing following the 2008 crash.
The great advantages for individual investors in the Caribbean region are that many islands have few or no residency requirements, and many operate Citizenship by Investment programmes deliberately to foster overseas investment. The terms of the programme offer to grant citizenship to investors in the local property market, making it far easier to do business in their more favourable tax environments and simultaneously improving liquidity in local property markets and in the local economy as a whole.
The World Travel and Tourism Council has predicted that Grenada, shortly to introduce its own Citizenship for Investment programme, will be the fastest growing market in the region between 2011 and 2021. The organization expects the programme to benefit not just high net worth individuals, but the market as a whole, by its positive impact on property values.
One solid recommendation for the returns possible from Caribbean investment is the increase in Chinese investment in the region. By 2013, according to analyst Richard L. Bernal, China was the area’s largest single source of foreign investment and the rise in Chinese involvement in the region continues.
And it’s not just the Chinese: foreign investment from all sources reached a record high in the Caribbean last year, according to the UN Conference on Trade and Development. Trade flows to the region increased by 18%, to total an estimated $294bn, or 38% of the world’s total.
It’s the tourist market in the area that underpins the growth of its property market, with Google search engine activity indicating a growth in searches for ‘holidays in the Caribbean’ of 48% in the year to January 2014.
That upsurge in interest in the region is confirmed by James Mannings, of Top Villas, who comments that ‘we have seen an increase of 31% from last year… it certainly seems as though those renting or looking to rent in the Caribbean are expected to benefit in 2014 and onwards with the continuing popularity of the islands.’
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