Page 106

Real Estate

The Real Estate Market

I

Chart 3 reviews the post Irma market for homes sales showing sales volume, number of sales per quarter and the median sale price. The data shows that while the number of sales increased in the months after Irma, the median sales price fell, reflecting the market focus on damaged property. The two sales that closed in Q4 2017, shortly after Irma, were already in contract before the storm where the purchasers still opted to close. One of those sales was a house priced at $1.6M which resulted in the high mean sales price for Q4 2017 of $890,000. By Q1 2019, the median sale price had dropped to $300,000.

n the aftermath of Irma, there were fears that the real estate market in the BVI would suffer as a result of damage to so many homes. In practice, Irma has been a catalyst for the real estate market, providing investors with opportunities to acquire hurricane damaged properties as many owners opted to divest of their investment rather than rebuild. More importantly, many BV Islanders decided to invest in the market taking advantage of the opportunity to acquire real estate they had previously not been able to afford. With so much destruction, the insurance companies were overwhelmed by the number of claims they had to process while for many people claiming insurance, problems of under-insurance became apparent. While most claims were settled by mid to late 2018, the delay in securing settlements, or agreeing settlements that were less than the cost of the damage due to under-insurance, have impacted property owners’ choices in deciding whether or not to rebuild. For many owners, particularly those living overseas who were unable to secure a reliable contractor or those without the wherewithal financially to rebuild, the only choice has been to sell their property “as is”. Faced with continued deterioration of their properties, owners of damaged property, priced for a quick exit which created a competitive market mainly in the $200,000 - $700,000 price range.

Between Q4 2017 and Q1 2019, a total of 71 properties had been sold at a total sales volume of $43M, averaging $605,000 per sale. Of these sales, approximately 60% were below $500,000 in value.

$1.00

$20.00 Median sale price ($M)

$0.80 2

23

No. sales per quarter

$15.00

$0.60 $10.00 $0.40

14 12

$5.00

17

$0.20 4

2

$0.00

$0.00

Q4

Q1

Q2

Q3

201 7

Q4

Q1

201 8

2019

Source: BVI Land Registry. Compiled by Smiths Gore (BVI) Limited

The renewed vigour in the residential market for “as is” property as a result of Irma and continued sales at Oil Nut Bay and Mosquito Island, has resulted in total sales volumes in Q2-Q4 2018 and Q1 2019 exceeding three of the quarterly periods in 2016 and the first three quarters of 2017 (with the exception of Q4 2018 which was slightly lower than Q1 2017).

As shown in Chart 4, the post Irma market has been dominated by local purchasers keen to acquire property at discounted values due to hurricane damaged condition. While there have been fewer foreign investors in the market, delays in closing due to the land holding licence system could indicate increased foreign investment in the coming months.

BVI Real Estate Market: Total Volume of Recorded Transactions 2016-2019 (US$M)

Post-Irma BVI Home Sales (Sep 2017 Mar 2019) Number of Sales to Belongers and Non-Belongers

Q4

Q1

Q2

2017

Q3

Source: BVI Land Registry: Compiled by Smiths Gore BVI Limited

104

JULY 2019

Q1

Belonger

11

201 8

Q3

Q4

12

10

7 5 3

2

Q2

16

Non-belongr

23.1443

13.9984

Q4

19.7393

19.1667

11.6538

13.4931

15.1972

9.0915 Q3

201 6

6.0346

Q2

4.2544

Q1

10.4771

12.9717

40.717

CHART 4

Q1

201 9

3

2

1 Q4

201 7

Q1

Q2

Q3

201 8

Source: BVI Land Registry. Compiled by Smiths Gore (BVI) Limited

Q4

Q1

2019

TOTAL SALES VOLUME ($M)

MEDIAN SALE PRICE ($M)

Total sales volume ($M)

Chart 2 shows that the property market has remained active post Irma, even in the last quarter of 2017 when much of the commercial activity in the BVI had ground to a halt. The table shows the total sales volume for all types of property (land, houses and other property) by quarter between September 2016 and the first quarter of 2019. Total sales volume (expressed in US Dollars) in 2018 and 2019 has been boosted by land and property sales at Oil Nut Bay (3 sales in 2018 & Q1 2019) and Moskito Island (2 sales in 2018). Both developments were pro-active with their respective post Irma clean up and repairs to ensure they were functional in the shortest time possible. As a result, Oil Nut Bay was open to home owners by Christmas 2017 and the general public by Easter 2018. At Mosquito Island, all home owners who had commenced construction prior to Irma confirmed they were proceeding with their respective projects.

CHART 2

Post-Irma BVI Home Sales (Sep 2017 Mar 2019) Sales Volume, Number of Sales and Median Sale Price

CHART 3

Profile for Business BVI

Business BVI July 2019  

The theme for the July 2019 edition is ‘A View Beyond the Horizon’, which is intended to reflect where the territory is post 2017, while at...

Business BVI July 2019  

The theme for the July 2019 edition is ‘A View Beyond the Horizon’, which is intended to reflect where the territory is post 2017, while at...

Advertisement