Knight Frank reports that the global economic crisis has had little impact on the price of luxury homes in the British Virgin Islands. Strict planning regulations and a small market in the group of 50 islands and islets in the Caribbean has helped keep values stable for years, say real estate analysts familiar with the market. European owners make up 60% of the market, followed closely by North Americans, and most are wealthy enough to ride out any drops in value, particularly when demand remains high in an area considered largely unspoiled by development. For more on this continue reading the following article from Property Wire.
Luxury house prices on the British Virgin Islands have remained largely static in recent years despite the global economic downturn and are expected to hold firm, according to an analysis from Knight Frank.
Prices have been propped up by the small size of the market which is made up of some 50 islands and islets, many of which are sparsely populated, as well as the lack of high density developments due to strict planning regulations, says Christian De Meillac of Knight Frank’s Caribbean department.
European buyers account for around 60% of total demand at the luxury end of the market, with US buyers also present. The market
gained momentum in the second half of 2011 a vendors re-assessed their asking prices leading to renewed interest from purchasers, he points out in a new analysis report.
‘Traditionally, purchases in the BVI are lifestyle driven and as a result the market is better insulated against economic fluctuations. The small size of the BVI property market, along with the continued demand and the limited supply, has helped support prices,’ he explained.
‘The wealthy profile of residents means that forced sellers are a rarity, most are willing to ride out the dip in the market and await more favourable conditions,’ he added.
He also pointed out that while a number of neighbouring islands saw their high density residential resorts struggle post 2008, the BVI’s minimal exposure to such projects, combined with strict planning regulations led to more muted price falls.
At the luxury end of the BVI market, European buyers dominate, accounting for 60% of luxury sales, with North Americans as a close second and local BVI purchasers making up the remainder of the market. This profile of buyers has remained largely unchanged for decades.
The BVI has emerged as a thriving financial centre, partly due to its reputation as a low tax jurisdiction, residents pay no death duties or income, corporation, capital gains or wealth taxes, making it a key target for High Net Worth individuals.
De Meillac believes that the chain of islands remain one of the more ‘unspoilt’ countries in the Caribbean. ‘Considered a yachtsman’s paradise, the BVI provide 50 islands and islets for sailing enthusiasts to explore. Its natural beauty and striking elevations make for a truly private and relaxed lifestyle,’ he said.
Waterfront property always attracts competitive interest, even in a subdued market and homes with private moorings appeal to the islands’ many yachting enthusiasts. The two main islands of Virgin Gorda and Tortola are popular with overseas buyers, in particular the western tip of Tortola, near Smugglers Cove and Long Bay Beach.
He also believes that the outlook is positive. ‘The tumultuous global economy has tested the residential resort model in the Caribbean which has led investors and buyers back to independent villas and sites on sub-divided plots, a market on which the BVI has traditionally traded,’ he explained.
‘This positive trend, along with Virgin Gorda’s new super yacht marina, with a capacity for 38 super yachts, should drive further investment and HNWI interest. We expect prices to hold firm in 2012 and current sales volumes to continue,’ he added.
This article was republished with permission from Property Wire.