THE CARIBBEAN IS BACK IN BUSINESS

Coldwell Banker Island Affiliates

The Caribbean and Western Atlantic has long been a destination for foreign buyers seeking a serene and warm climate with many calling the islands their second or third home. What many of us forget however, is that each of the islands that we serve are essentially separate countries, with varied cultures and laws that impact foreign buyers.

Obviously, COVID-19 dramatically impacted their local economies and housing markets. But, as the pandemic has faded into the rearview mirror, the islands have re-opened for business and foreign buyers are showing increased interest. Here is a closer look at some of the markets we serve:

Aruba

Coldwell Banker Aruba Realty reports that 90% of his company sales are to non-residents with most coming from the U.S., Canada, the Netherlands, Germany, Colombia, and Brazil. There are 75 nationalities residing on the island and the trend continues to increase. 

These buyers are being met with limited inventory and thus, prices have remained high - but so has the interest in Aruba. Everything is selling – existing single-family homes, pre-construction condominiums, new construction, and even land. 

Most foreign buyers are using cash for a second or third vacation home, so are largely not impacted by rising mortgage rates.

Sint Maarten

Sint Maarten’s growth has been thriving with each passing day since the pandemic, boasting new developments and an influx of properties. 

Coldwell Banker Premier Islands Realty shared that many locals now invest in real estate, capitalizing on the surging demand for vacation rentals and Airbnb accommodations. 

Throughout the pandemic, the island's real estate investment market consistently remained strong. Today, foreign buyers will see tons of new developments in progress with new construction from the $200,000-$500,000.  

Banks in Sint Maarten have been offering various mortgage programs, most in the 6-7% range, with some even providing 100% financing. Local insurance companies have also been offering mortgages at a competitive interest rate of 5%.

Jamaica 

Jamaica is experiencing notable growth, despite some regions facing inventory shortages, according to Coldwell Banker Jamaica Realty. A contributing factor to this growth is the absence of restrictions on foreign citizens purchasing properties in Jamaica. While there may be visa requirements for visitors based on their country of origin, the country is essentially open for business and has been actively promoting its real estate opportunities.

A substantial portion of Coldwell Banker Jamaica Realty’s buyers are Jamaicans living abroad who have a strong interest in investing in their home country. Additionally, they are seeing an increased demand from non-nationals seeking vacation homes in Jamaica. Delta and Southwest airlines have added new routes to the Montego Bay area. The government is also seeking new routes from South America as tourism is now at all all-time high this year. 

Dominican Republic 

Coldwell Banker Prime Realty notes the island is in a growth phase led by increased tourism and new construction homes being built in Punta Cana and Casa de Campo. These have become popular destinations for both tourists and potential property owners/renters.

Buyers looking to purchase in the Dominican Republic can benefit from laws such as the CONFOTUR tax exemptions, which allow buyers to bypass the 3% Transfer of Title tax and the annual 1% property tax for 15 years. While not available for all properties, many of the new construction developments are able to provide CONFOTUR tax exemptions, which is a tremendous benefit to buyers. 

Coldwell Banker Amber Coast notes that while prices are rising dramatically on other islands, buyers are looking to take advantage of the value found in real estate in the Dominican Republic’s northern coast in Puerta Plata. Buyers who purchased just a year or two ago are benefitting from a 50% gain in value.  There is still plenty of inventory for those looking for a single-family home or condo for under $500,000.  In this area, you can purchase a four-bedroom home with a pool for about $400,000. Want a condo on the beach?  They are available in the $300,000 range.  Investors are also taking advantage of the growing rental business through increased tourism.

Turks and Caicos

Coldwell Banker Turks and Caicos Realty reports that 85% of their foreign buyers come from the U.S. and Canada. They are mostly young entrepreneurs. These buyers value the island’s relaxed lifestyle along with the absence of restrictions on foreign ownership of real estate as they make Turks and Caicos their primary residence for tax purposes. 

More than 50% of Coldwell Banker Turks and Caicos Realty’s  foreign buyers pay cash for their property on the island while others finance their homes by leveraging assets in their home countries.

Foreign buyers are starting to prefer newly constructed villas and condos over existing inventory, prompting a wave of new developments in desirable areas such as Leeward.  Long Bay and Turtle Tail fall closely behind as desirable neighborhoods. Villas can be priced upward of $10 million, while condos are reaching an average sale price of $1 million. Beachfront land prices in Long Bay, for example, have risen from $200,000 per acre in the early 2000’s to $6 million per acre today.

Grand Cayman

Although Grand Cayman faces similar challenges as the U.S. with low inventory and high interest rates, Coldwell Banker Cayman Islands Realty, is seeing more and more of their buyers permanently leaving the U.S. and Canada for the island. 

Despite COVID putting a damper on travel to the Caribbean, those years were quite kind to the Cayman real estate industry. Many international sales during this time were made via video calls and local home inspections to account for the lack of in-person showings and walkthroughs. 

Travel to the Grand Cayman has increased largely because of Cayman Airways doubling the service of flights from California to twice a week. The West Coast has discovered the Caymans! 

Grenada

This 24 square mile island nicknamed “the Spice Island” has been getting a lot of attention lately due to its unspoiled beauty and its citizenship by investment program.  Many people are purchasing condominiums to obtain a second passport and gain residency options.  

The natural beauty of the island is its main attraction – 40 beaches, waterfalls, diving sites, sailing, and rainforest. One of the smallest, independent countries in the region, Grenada’s official language is English which makes it an easy transition for most.

The cost of living is considerably less expensive than in the United States and there are no capital gains, inheritance tax, income tax, or wealth tax on your worldwide assets or income. 

Jet Blue just added its second daily flight from New York due to the demand to visit this quaint and up-and-coming island. 

U.S. Virgin Islands

The U.S. Virgin Islands have had an incredible few years since the pandemic started according to Bry Locher, manager of Coldwell Banker St. Thomas. The foreign buyer pool has grown extensively. Prices have remained steady and inventory is slowly increasing. Investors are snatching up properties for vacation rentals for the demand for these properties is high. 

US citizens can buy property in the U.S. Virgin Islands and move to USVI without a visa or work permit, just like in any other U.S. territory or state. In addition, there are great tax benefits. All the tax laws in effect in the U.S. are “mirrored” to the U.S. Virgin Islands, with USVI residents paying income taxes to the islands instead of the U.S. For those who qualify, this can result in up to a 90% reduction in income taxes and a 100% exemption on property taxes. Add the white sand beaches and deepwater harbors, and you have yourself the best of paradise!Coldwell Banker Island Affiliates offers a series of Buyers Guides for each of the islands we serve allowing foreign buyers to gain insight into residency and tax laws, along with other critical information. For more information, visit www.coldwellbankerislands.com or email .

By Carla Kidd
Director of Development & Strategic Engagement
Coldwell Banker Island Affiliates