Since early 2020, Caribbean real estate demand has steadily increased both in exposure and desirability. There’s no doubt that the onset of COVID 19 sparked a focus on the importance of living a healthy lifestyle, and many homeowners recognized the role their surroundings play in meeting their wellness objectives. In addition, the growing acceptance of remote work has also created geographical flexibility, and offshore properties are the beneficiary of this new dynamic. With the demand for waterfront properties in the USA at an all-time high and available inventory at an all-time low, luxury homebuyers are extending their search to the Caribbean and beyond. With COVID now becoming a reality of everyday life, several factors will continue to drive the rising demand for island locations:
Scarcity Driving Prices Higher
As the market demand continues to rise across the country, home prices have increased by an average of 15%, with the luxury market seeing even higher price escalation. Islands, such as St. Barts, Anguilla, the Turks & Caicos, and Barbados are experiencing significantly increased demand for their luxury properties which already enjoyed premium pricing.
They’re Not Making More Oceanfront
There is a huge demand for newly constructed oceanfront homes. As a result, direct ocean residences are in very limited inventory throughout coastal states like Florida, the Carolinas, and California. While wealthy buyers are willing to pay top dollar for oceanfront property, there is often a lack of contemporary modern architecture combined with high-end services. This is pushing the luxury second home buyer to look past the United States towards new destinations. After being confined to more congested metropolitan areas, wealthy individuals are in search of safe havens where natural social distancing occurs.
Safety a Priority
According to former New York Governor Andrew Cuomo, “more people are now dying from gun violence and crime than from COVID.” With reports of crime waves dominating headlines, buyers are seeking a more isolated, tropical island retreat. Across the United States, many of the major metropolitan markets continue to see upward trends in 2021, and there’s no sign of this changing in the foreseeable future.
Private Island Investment
According to a recent article in Caribbean Journal, private island investments and raw land acquisitions are trending right now as well with no end in sight. Investors are acquiring many resort properties that were abandoned due to hurricane damage and outdated properties in need of restoration. After the improvements are completed, the surrounding real estate components hold significant profit potential. Empty oceanfront land parcels with a view are also being sought out to build small to medium-sized resorts with residential development. Combine the distressed property pricing with the lack of capital gains and income taxes, and investors find these properties extremely attractive.
Convenient Travel Options
While some Caribbean destinations are more convenient than others, locations like Puerto Rico, Jamaica, Dominican Republic, and The Bahamas are more accessible by air or sea than ever.
While the commercial airline industry suffered during the pandemic, the private jet industry gained in popularity. According to Elite Traveler, “private jets allow consumers to travel with minimal interaction with other people on the flight and in the airport. Private jet membership company Airshare says that a passenger on a commercial flight, with check-in security and boarding, will encounter 700 points of contact on every flight, while a customer on a private jet will only go through 20 touchpoints. Many private jet companies are seeing this translate into an increase in memberships.” Private aviation allows travelers to commute without the fear that comes with commercial aviation, making offshore destinations more accessible than ever.
The yachting and boating industries have also skyrocketed over the past 18 months, showing no signs of slowing any time soon. With a shortage of dockage for megayachts, the marina industry is also exploding with growth throughout the Caribbean.
Offshore properties now represent an excellent opportunity to combine investment with healthy living. While some seek homes offshore to use as a vacation or secondary homes others seek the solitude of remote business, away from the hustle and bustle of city life. For global travelers, several Caribbean islands operate Citizenship by Investment programs which offer eligible applicants the opportunity to apply for full citizenship in exchange for an investment in real estate.
Stephann Cotton, founder, and CEO of Cotton & Company, the nation’s leading real estate marketing agency, is bullish on the future of Caribbean real estate. “The market dynamics have aligned to create demand for offshore living,” says Cotton. “We believe the current trend will continue as the world accepts the reality that there may be more pandemic threats in our future. Lower density and solitude combined with natural adventures, healthy lifestyles, and a high level of service will continue to be in demand.” Cotton & Company continues to assist real estate developers throughout the region to strategically target wealthy US homebuyers considering offshore investments. For more details on the firm’s strategic advertising, marketing, web development, and sales support services, visit cottonco.com
