We on the margin have been observing the skyrocketing prices of real estate in Barbados, especially on the Platinum coast. We can well understand the logic of investing in real estate particularly on the coast in Barbados, after all there’s only so much land and they aren’t making any more of it. Traditionally real estate has been seen to be… as safe as houses. (sorry for the pun) the old bajan saying of “Land don’t spoil” has been a truism that traditionally could be counted on as readily as the sun coming up tomorrow.
The legions of real estate agents will tell you that land has never declined in value in Barbados. In fact the tremendous appreciations in property values has attracted international attention, with international agents who market to the affluent UK market. Now here’s where things get interesting….
The price of premium property in Barbados is out of the reach of all but a very few Bajans. And further if we’re honest much of it is already owned by BVI corporations to get around the issues of property transfer tax. The reality is that the demand for Barbados property is being driven not by the Barbados market but by the UK economy. Suddenly things don’t look so rock solid any more.
If we then factor into the picture the possible effects of a global economic slowdown (keep an eye on that sub prime mortgage crisis) it is VERY possible that in such a scenario, Barbados’ overvalued beachfront could become just so much seawater and sand.