With global real estate values hitting all time lows, many investors are looking at buying opportunities in real estate markets which represent excellent opportunities for medium to long term investment. Caribbean development projects are still receiving financing and new build homes for permanent and vacation occupation are continuing to demonstrate resilient sales figures and stable home values in defiance of other international markets, notably those of the United States.
There are numerous Caribbean investment opportunities available in dollar-denominated countries (by dollar denominated we mean those economies where the US dollar is either the adopted local currency or runs parallel to the domestic currency) and this economic tie has allowed the easy flow of capital into their domestic housing markets as investors seek better returns than are available elsewhere.
In 2008, the Caribbean development sector for housing experienced positive net inflows of capital demonstrating the confidence many investors are placing in the region as they position themselves for the global economic recovery which will fuel house price appreciation once more. For the vacation market in particular, the strong US dollar has generated a surge in US residents looking for holiday homes to rent as their tourist market enjoys positive growth on the back of foreign exchange disparities while even with a strong US dollar, Europeans still use the area as a holiday destination due to the overall low costs associated with cheaper air travel and domestic cost of living.
Financing for home purchases in the region has significantly developed in the last five years alone with many European, US and Far Eastern banking operations actively promoting their loan facilities for the international property purchaser. Local income and legal requirements have also been dramatically relaxed as domestic lenders seek to develop their own businesses and are more amenable to offshore non-residents taking out facilities as the relative strength of their ability to service and repay loans outstrips those of domestic residents and which represents very good business to local banks and lenders.
The outlook for 2009 is a stable one with home prices not expecting to experience a surge in appreciation until the recovery sets in, however, in this period of investor apprehension, now is an excellent opportunity to buy homes as the Caribbean investment potential is huge once economic constraints are eased. 2010 house prices are anticipated to recover dramatically and potential investors are advised to buy in 2009 in order to capitalize on the gains in the market as economic normality returns. In any event, the returns on vacation rentals are increasing due to the relatively low capital investment now required and many 2009 investors are enjoying superb return on investment percentages that more than service the loan and expenses required for a vacation home purchase.
The Caribbean is a top holiday and retirement destination for European and US residents and this is creating strong local market conditions which are currently sustaining Caribbean development and investment. Expect stable growth and good return on income numbers for 2009 with excellent growth potential after 2010 while enjoying the sun, sand and local setting that is attracting hundreds of thousands of tourists and new residents every year.
