Faced with sky-high property prices and wet weather at home, UK househunters could be forgiven for looking to warmer climes in their hunt for the perfect property. But where? The acres of press coverage recently given over to Dubai suggest that the market there is near saturation point; while the collapse in US house prices makes a holiday home in Florida look unattractive for now, at least. One destination that has largely been overlooked is the Caribbean, although you'll have to look further than its best-known attraction, Barbados.
A steady economy and decades of tourism mean the island now looks somewhat overdeveloped; its west coast is "served seven days a week by international flights and regularly suffers from traffic jams that would make any big-city dweller proud", says Nicola Venning in the Financial Times.
Investing in Caribbean property: the attractions of Antigua
So what about the less famous islands? Antigua's established tourist industry and infrastructure makes it an attractive holiday-home location and then there are the tax breaks. "You don't have to be a millionaire to live here, but it helps," as Stephanie Clark puts it in The Sunday Times. In 1995 tax laws were changed to attract high-net-worth individuals it is now easier for foreigners to claim residency, and thus pay no income tax. Prices have risen by an average 100% over the last two years, but are still affordable. Although the island is home to celebrities such as Giorgio Armani and Timothy Dalton, two-bedroom waterfront villas can be had for around £175,000.
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Investing in Caribbean: reasons to love St Lucia
Next on the sliding scale of price versus infrastructure is St. Lucia. It is among the islands playing host to the Cricket World Cup this year, and in its desire to attract tourists, the government has passed the Cricket World Cup Incentives Act. Builders of new property developments do not have to pay import duty on materials or furnishings, while income generated from the property will be tax-free for a decade after the tournament is over. Inevitably, 107 developments are now under construction, which means the market is set to become saturated very quickly. That will hit prices, leaving many on "a very sticky wicket", says The Daily Telegraph's Jeremy Bacon.
On top of this, there are "serious concerns about rising crime", warns Bacon. In 2006 there were 37 murders on the island; with a population of only 160,000, that gives it one of the worst murder rates in the world.
Investing in the Caribbean: opportunities in St Kitts
St. Kitts is perhaps the most attractive opportunity in the Caribbean. In the past, the island's most important source of income was sugar-cane production, so there is little by way of tourist infrastructure. But the collapse of the sugar industry means attention is now focused on attracting foreign investment, giving property investors a "brief window of opportunity", says Nicola Venning in The Independent. Two-bed beach condos can be bought for around £140,000, despite soaring land prices which have doubled from £2.60 per square foot to £5.25-£7.88 in the last five years. Although the island is currently served by just one direct UK flight a week, this is likely to increase, meaning that "in a few years St. Kitts could well be one of the most chic and expensive islands in the Caribbean".
Investing in Caribbean property: St Vincent and Bequia
But if you really want to buy at the bottom of the market, then head to
St. Vincent. "You name it and St. Vincent probably hasn't got it," says the Daily Express. Up until the EU's 1999 vote to end preferential treatment of ex-colonial banana imports, the island was one big banana plantation. There are no direct flights, but an international airport will open in 2010. "When completed it will be an enormous boost to St. Vincent's tourist trade and property prices," says the Daily Express. The island will also receive a boost as cricket fans descend for the World Cup. It is also offering investors tax incentives: the island has no capital gains tax, and profits from property will be free of income tax for 20 years from 2008.
Finally, for the truly adventurous, there's Bequia, next door to St. Vincent. Bequia doesn't have mains water and most building materials have to be shipped in from nearby islands; yet in the quest for foreign investment, 1,000 acres of government land have been released for residential development. But the lack of infrastructure means there is a limit to how far any boom can go demand isn't going to soar while the main source of water is a butt in the garden.
For more on Caribbean property, visit www.brown-co.com, www.antiguaestates.com and www.caribbeanparadiserealty.net.
