Barbados Property News October-November 2017

EE NE FR NLI O &

Terra Caribbean - Page 4

Altman Real Estate - Page 13

Massy Realty - Page 20

BARBADOS PROPERTY

NEWS www.barbadospropertynews.com • October - November 2017 • Issue 113

Ashley - Page 24 Endorsed by the Barbados Estate Agents and Valuers Association Inc.

B A R B A D O S

Editor’s Comments What a September it was – certainly a month to remember! Unfortunately not for all the right reasons. The BPN August September edition highlighted the upcoming hurricane season. Never in our wildest dreams did we expect the region to be hit by not one but two mega storms – the like of which has not been seen in the region in decades or indeed, ever. The rapid increase in severity of Hurricane Irma and Hurricane Maria from Category 1 to Category 5 stunned even the most experienced meteorologists in the area. The damage done to life, property, infrastructure is still making the news – Dominica, St Martin, Barbuda, Puerto Rico, the Virgin Islands, Florida Keys – all took a hammering. It’s at times like these when the importance of preparation, insuring and taking every possible precaution are so important.

Pamela Hiles, Editor Our little island of Barbados was spared. For this we are all truly grateful. Barbadians have rallied around the other islands, sending relief in so many ways from local firemen to supplies. We have all donated to the various relief efforts as we all know, someday we may need help too! Many of the overseas relief efforts such as the British soldiers are based in Barbados.

The beaches are coming back after some rough seas, the sun is shining and there are plenty of lovely places to buy or rent on this paradise of an island.

As we move towards the traditional busy Christmas season, a time when many Barbadians spruce up their home, enjoy what is on display in this issue of Barbados Property News. This is a special place. It’s only so big so have a look and live the dream.

On the Cover: Ashley Furniture Homestore

Publisher – Hiltop Publications Ltd, 11 Cottage Ridge, St George, Barbados, BB19071 Tel (246) 228-9122, Fax (246) 228-0243 Email: sportingb@caribsurf.com www.sportingbarbados.com www.barbadospropertynews.com www.caribbeanpropertymag.com www.caribbeanmortgageservices.com Editor/Advertising – Pamela L Hiles Design and Art Direction – 809 Distribution – Hiltop Publications Ltd, Brian’s Print Brokerage Printing – Coles Printery The Material and editorial contained in this publication have been deemed accurate at the time of going to print. The views expressed as editorial are those of the Editor unless stated otherwise. No part of this publication may be reproduced without the consent of the permission of Hiltop Publications Ltd.

If you would like to advertise in Barbados Property News call Pam at 228-9122 or 232-0692

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Fractional Ownership

Feature

- the no-hassle way It sounds idyllic: two weeks of guaranteed warm weather in a private house every year, with no hassles over maintenance.

Such are the promises of the holiday home ownership system known as fractional ownership (FO) – but does it make financial sense?

It works like this: a buyer purchases a stake in a Royal Westmoreland property for a set number of weeks. This is typically two to six weeks per year, meaning a property may be sold in 26 to 9 “shares”.

Most schemes oblige people to use their shares at different times of the year to ensure each owner has a chance of enjoying the best weather, fitting in with school holidays, a winter break and so on. Some offer a fixed period of time with a points system to move around to different times of the year and different size accommodations.

Most of the world’s FO schemes are in Florida and the Caribbean – where weather makes all seasons of the year popular

with buyers – but there are some in southern Europe and a number at European golf courses where players enjoy winter rounds as much as summer.

The FO properties are typically managed by the owners of the resort in which they are located and, depending on terms and conditions, buyers may let out their shares informally to friends or on a commercial basis.

And because you own a share of the property, you also share in its financial fate if it appreciates or depreciates.

“The difficult global market has helped. People realise this is a great alternative to buying a holiday home outright,” claims the manager of a fractional scheme, in the Caribbean.

“They know they’re realistically only going to use it for about six weeks each year and the thought of all the maintenance being taken care of in their absence and running cost shared between co-owners is very appealing.”

There is an annual service charge that is usually equal to about 2 nights rental in the same accommodation for a 7 night stay.

This sounds perfect, at least for those who can afford it, but FO is not without its issues.

Firstly, it has had to shed its association in the minds of some with the much-hated and often mis-sold time share schemes of the past.

It has also had to distance itself from so-called destination

Royal Palm Villa - Royal Westmoreland

32

Fractional Ownership

clubs – these offer members the right to stay in a range of properties, sometimes in different countries, but do not include any form of actual ownership.

Secondly, buyers of perfectly legitimate and good-quality FO homes may nonetheless find it hard to secure a mortgage if they cannot afford to buy a share in cash.

“It’s not viable to get a mortgage as multiple buyers of one property mean lenders can’t take security on it,” explains a mortgage broker. “The fact that many of these schemes are overseas only makes lenders even more reluctant.” Many developers will offer vendor financing to act as a bridge loan for buyers while they secure funding from leveraging assets at home.

A third problem is that the FO resale market has been an unknown quantity. FO operators accept that owners will want to sell, although there is no guarantee that a share will retain its value. Most provide a resale offering and will often recommend third party on line resellers. This allows for prospective purchasers to check for bargains on line before purchasing from a developer directly. Owners also have the option of “willing” thier shares to relatives when an owner passes away – this appears in many schemes’ websites and brochures.

The last question mark is whether FO actually represents good value. In many cases the cost of a share is similar to or even

greater than a deposit on a holiday home in the same area: the former offers the convenience of a managed property for two to six weeks a year while the latter requires a buyer to maintain it themselves. Both allow the possibility of capital appreciation plus rental income if the property is let out when not used by the owners.

However, for those who don’t want the financial or practical burden of a traditional second property, FO schemes really are a no-hassle way of enjoying a holiday home in the sun.

Many schemes even have links with other fractional resorts in other parts of the world, thereby allowing owners to swap shares at their “home” resort for time at other participating schemes.

“Our share translates to four weeks per year, although you can get extra time or rent spare accommodation,” says Jeremy, a retiree.

“You always stay in your owned property when you come at the time you own, or you can come outside your ownership time and will be allocated any one of the homes in the developer’s rental properties .

“We therefore cannot leave things in place but there is a local storage facility so you can leave clothes and a few belongings.”

The service charge covers communal gardening and swimming pool maintenance, access to amenities, the cleaning of the properties and the provision of toiletries and towels.

Idyll Moments Villa - Royal Westmoreland

33

Seaside Realty expands on the South Coast From a single man show, first based out of his home… .. Lee Gooding continues to grow and expand Seaside Realty with his wife Chantelle by his side, along with their loyal & dedicated team of eight!

Not only has their team and portfolio of properties grown over the years, but now so has their office. They’re the “newest kids on the South Seaside Realty Coast block” boasting a beautifully outfitted office with amazing visibility on the main road.

"We loved our charming West Coast chattel house, but positioning ourselves on one of the busiest roads on the island

36

Real Estate News

with non stop drive by & walk in traffic, is an opportunity I could not pass up. It’s more convenient for our staff as many of the ninety properties we manage are located on the South Coast.

And it also gives us more space for our existing agents and any new staff that may join our team in the near future”.

Over the past eighteen years Seaside Realty has become one of the most successful in the industry mainly because of their professional yet personable approach. “It’s never just been about the dollars & cents for me! Every sale, every rental and everyone deserves to be treated with the same respect, honesty & attention… whether it’s an $800 hundred dollar rental or an $8 Mil. sale”. I believe that this is why 80% of our clientele is repeat, and most new ones are from ‘word of mouth’. That’s when you know you’re doing it right”.

So if you’re in the neighbourhood and looking for a friend in real estate, I encourage you to visit the folks at Seaside Realty.

They’ve got designated parking, happy agents, comfy couches and a cup of freshly brewed coffee waiting for you there!

The Barbados Estate Agents & Valuers Association News

Real Estate News

Barbados Valuers Council partners with the RICS to facilitate professional development

In line with its mandate to promote the continuing professional development of Valuers in Barbados, the Barbados Valuers Council (BVC) will be jointly hosting its first educational event in partnership with the Royal Institute of Chartered Surveyors (RICS) on October 30th, 2017 at the Hilton Barbados commencing at 8:30am.

The RICS is the leading global professional body for land, property and construction professionals. Originally established in the UK by Royal Charter in 1868, the RICS acts as a regulator of both its individual members and firms in order to promote the highest standards of professional practice. The RICS Barbados chapter was established with a goal of linking the Barbados community of professionals with the global network and they are happy to be partnering with the Barbados Valuers Council in furthering their common goals for the Valuation professional in Barbados.

The RICS Valuation – Global Standards 2017 (formerly known

38

as the Red Book) were published following public consultation and contains mandatory rules, best practice guidelines and related commentary for all Valuation professionals. The latest edition takes effect from 1 July 2017. The RICS Valuation – Global Standards 2017, in conjunction with International Valuation Standards are the internationally recognized standards for Valuation Practice worldwide and have been adopted in the wider Caribbean as the expected standard of practice despite the lack of formal regulation of professionals in most islands.

The Barbados Valuers Council looks forward to an informative event open to Valuers, aspiring Valuers, and other industry stakeholders for a full-day seminar including a discussion on the changes issued in the RICS Valuation – Global Standards 2017 as well as panel discussions and workshops on valuation standards and reporting.

The event will be the first of a number of joint initiatives being worked on between the BVC and RICS to further the Valuation Profession in Barbados. The parties are in the process of discussing further formal educational opportunities for Barbadians interested in becoming Professional Valuers.

Persons interested in attending the event may register through the RICS event page. For further information please contact our administrator at admin@beavainc.com The Barbados Valuers Council continues to invite practicing Valuers to apply for membership by contacting admin@beavinc.com or stay tuned for updates on the BEAVA website at www.beavainc.com for further details on membership categories and admissions criteria.

Cornering The Agents

Real Estate

by Kim Goddard With the markets changing rapidly it is difficult to know how to position offers as a buyer and how aggressive to be as a seller in pricing a property. It seems that as one segment of the market goes down another starts to grow. Kim Goddard questioned two of our established real estate agents on the current strengths, opportunities, weaknesses and threats in the market that they are experiencing during the last two months and are looking forward to in the next two months in the Barbados real estate market.

What strengths and opportunities are you finding in the current market?

What strengths and opportunities are you finding in the current market?

Purchasers:

Purchasers:

1. Reality is that buyers are in the driver’s seat; they dictate market pricing. The result of Brexit last June caused list prices to be adjusted downwards by as much as 20% to reflect the Jeanie Mahon - Terra Luxury devaluation in the Pound.

This has opened the door for good opportunities for buyers to acquire properties at discounted prices.

2. Properties have become more affordable than they have been in the last 10 years.

3. Reduced prices means that buyers can acquire some homes at price points less than replacement cost!

Vendors: 1. For vendors, there is opportunity to sell property quickly by adjusting property prices to keep in line with market expectations. However, even with the opportunity to sell quickly, price adjustments are typically indicative of significant price drops which are often further negotiable at the time of sale.

2. Many vendors purchased in earlier times when the Pound Sterling was strong and the exchange rate to the USD was 2:1 so vendors can afford to discount their prices and in some cases, still profit on the sale of their home.

What weaknesses and threats are you finding in the current market?

Purchasers: 1. A major obstacle is the length of time a transaction can take to complete. Sale transactions can take 3 - 6 months to close, sometimes longer. Sometimes, the delay can be caused by attorneys working slowly. This is why it is so important for purchasers to choose reputable lawyers known to be responsive and thorough but also work quickly.

2. The recent introduction by the BRA (Barbados Revenue Authority) which mandates that TCC (Tax Clearance Certificates) 42

The local market is dominate in sales, with properties under US$375,000 being the sweet spot. This is strengthened by the low interest rate being offered by local lending institutions Lee Gooding - Seaside Realty throughout the Island.

It has also become cheaper to purchase a ready built house and renovate it; than it is to buy land and build from scratch. We are also seeing additional properties coming on the market through the Banks as they continue to enforce foreclosures.

Vendors: Some of the big developers are finding ways to try and attract the purchasers who are looking to find new places to invest their money. Developments like Port Ferdinand and Saint Peters Bay, are now offering a fixed return on your investment of up to 4.75 % for 3 years if you purchase from them. This return is supported by the developers demand in the short-term rental market for their product. This is great news for investors as they don’t have to pull their pocket for the running cost and they have an investment working for them.

What weaknesses and threats are you finding in the current market?

Purchasers One of the biggest threats in the market continues to be the time it takes for a transaction to close. For those needing financing, even with pre-approval, it takes months to get the funding in place. Vendors get disheartened and pull the property off the market or open the property to other buyers resulting in transactions falling apart.

The low exchange rate in the Canadian and UK markets are continuing to prove to be a deterrent for foreigners to invest in Barbados at this time. This is limiting the number of potential buyers, forcing a focus on suitable buyers in the local market.

Jeanie Mahon continued...

Lee Gooding continued...

are filed to ensure that tax affairs are in order, can cause the process to slow down drastically if either party does not have all of their affairs in order. The requirement for this document is mandatory from both vendor and purchaser and must be sorted prior to sale completion.

3. Another weakness we experience is the drawn out mortgage process - banks can take months to approve serious purchasers.

This delays the buying process and can sometimes cause deals to fall through. In recent times, banks like RBC have become more competitive with turn around time and favorable mortgage rates. There is also the option of using a mortgage broker like that of Caribbean Mortgages which helps the mortgagor find the best suited mortgagee at competitive rates and cuts down research time significantly.

Vendors

Vendors: 1. They must reduce pricing significantly to move their properties 2. Some lose on trade prices and do not have much choice if obligated to sell 3. They continue to experience very low offers on their homes too low for consideration. These are low offers against already reduced asking prices. They also can experience frustration with the uncertainty amongst buyers due to some reasons stated herein.

4. Buyers have options outside of Barbados. Property is considered ‘expensive’ and with trendy islands offering a similar lifestyle to buyers, it creates a competitive climate.

Owners are not getting the price they wish for their properties in this market. This has resulted in the very marketable products refusing to bend on pricing and stalling the number of transactions.

We find valuations are coming in low in this cautious market, reducing the number of Vendors to those that will reduce their asking price to match the valuations. Vendors that will not reduce their price are waiting out the market by using rentals to cover costs.

DUDLEY WOOD, GIBBS, ST. PETER

DUDLEY WOOD, GIBBS, ST. PETER: Beachfront villa for holiday rental 4 bed, 4 bath on a beautiful white sandy beach and excellent swimming with a large pool, gazebo with bar & sun deck.

Summer US $875.00, Winter US $1,500.00, Christmas US $2 $2,300.00 2,300.00 per night.

5TH GREEN 5TH GREEN, ROCKLEY NEW ROAD, CHRIST CHURCH

Spanish style 5,300 sq. ft. villa 3 bed, 3 bath in main house & 1 bed self-contained apar rtment. tment. Overlooking Ov apartment.

Rockley Golf Course on 15,960 sq. ft. landscaped gardens.

US $1,250,000.00

CORAL CLIFF LOT 21 CORAL CLIFF LOT 21, MA MAYNARDS, YNARDS, ST. STT.. PETER 20,550

neighbourrhood. hood. Located sq. ft. of prime land in an upmarket quiet neighbourhood. minutes from Speightstown and west coast beaches.

US $250,000.00 SIGNIFICANTLY SIGNIFICANTLY REDUCED

STEPNEY RIDGE 6 STEPNEY RIDGE 6, ST ST. T.. GEORGE: Executive home with spectacular views over the St. George valley valley.y.. Main M house-3 bed 2 ½ bath, apartment-2 aparrtment-2 tment-2 bed, 2 bath & granny flat totalling 5,990 sq. ft. on 15,695 sq. ft. of beautiful gardens, pool and gazebo.

US $1,175,000.00 REDUCED-OPEN TO OFFERS

CLERMONT GARDENS LOT 4 CLERMONT GARDENS LOT 4, ST. ST T.. JAMES: Great residential or commercial potential with this large lot lot 20,826 20,826 sq. sq.ft.ft.Close Closetoto W Warrens. arrrens.

US $175,000.00 – PRICED TO SELL

WHISPERING PALMS WHISPERING P PALMS, ALMS, BELAIR PINES, ST ST. T.. PHILIP:

ern, n cliff front 8,600 sq. ft. villa, 4 bed, 4 ½ Newly built, modern, moder bath with pool & magnificent ocean views on 57,000 sq. ft. of land. Also available for holiday rental.

US $2,950,000.00

PIEDMONT LOT 17

Corner Cor rner Lot ighly desirable neighbour rhood, hood, located between 13,956 sq.in a highly neighbourhood, Holetown & Speightstown, close to west coast beaches.

US $225,000.00

PIEDMONT LOTT 17, GIBBS, ST ST. T.. PETER:

Call now!

246.832.4604 info@luxecaribbeanproperties.com www.luxecaribbeanproperties.com www .luxecaribbeanproperties.com