Archive for the 'Real Estate Market Update' Category

We are half way through May and effectively at the end of the high season at Re/Max Elite, in the Turks and Caicos Islands, and after a disappointing 20 months in the global real estate market, we have lots to look forward to. In the TCI, we have recently seen a reduction in stamp duty and you can see my recent blog on the list of reductions for each price bracket.

The new hospital has opened in April and we are blessed with state of the art medical facilities that are better than anything I have personally attended in the UK. You can view more information on the Hospital here.

The new airport expansion was announced last year and the construction contract was recently awarded, after a lengthy bidding process. The contractor hopes to start work as early as June. The newly completed airport will allow access to larger aircrafts, which will open up the islands ability to attract other carriers and open up new flight destinations. I am keeping a close eye on what evolves in this regard, but I believe we may possibly see additional flights to Europe, which would hopefully have a positive impact on bringing the fares down that British Airways charge for its direct Sunday afternoon flight. I actually do like the BA flight from Provo to London, but if we can bring in competition and make the trip a little more cost effective, we will surely then see progressively more Europeans coming to the islands.

In speaking with all my friends who operate hotels on the island, they have all commented on what a significantly improved year it has been for their occupancies during this high season, albeit they have all had to offer better rack rates to compete with each other. I have frequently been informed by a number of operators that they have frequently seen 100% occupancy and I can’t recall anyone saying this in 2009!

The underlying strength and characteristics of the Turks and Caicos Islands remain intact and the light is bursting through the tunnel in terms of infrastructural advances that will take this island forward in to our next real estate cycle.

Simon Padgett, Broker, RE/MAX ELITE, Turks and Caicos.

Interesting news from the Turks and Caicos Islands real estate market:

Re/Max Elite Broker Simon Padgett stated “I am very encouraged by the recent news that Stamp Duty is being lowered across the islands”

“Whilst I do not believe it will significantly increase new real estate enquiries in the short term, it will actually enhance the chances of those who have perhaps been hesitant on making a purchase to move forward and buy something. I have found that we have a group of buyers who feel our price drops have some way to go, then you have others who feel we are at the bottom. It is the latter that have been making the recent purchases. It is the group that lies somewhere in the middle that I feel this reduction will be seen as the catalyst that makes them move forward with a purchase.

My own personal thoughts on real estate values is that certain areas have bottomed out and the properties that still need reducing are those where owners are simply not realistic about their market values and are dictating to their agents what they feel it should be priced at versus accepting the factual advice they are receiving.

In essence, whether we like it or not, we are in a buyer’s market and this reduction goes a significant way to enhancing the absorption of properties on the Turks and Caicos Islands and creating excitement whereby buyers start to hurry to buy a certain bargain, before somebody beats them to it! I am starting to see this in certain areas already and this reduction only goes to aid the acceleration of this process and take us into the next cycle”

The new fees apply to all islands except North Caicos, Middle Caicos, East Caicos, South Caicos, Grand Turk and Salt Cay, which are 50 percent of the following rates:

Less than $25,000—no duty.

$25,000-500,000 — 4%

3.6% — one payment

1% — four payments

$500,000-1.5 million — 6%

5.4% — one payment

1.5% — four payments

$1.5-3 million — 8%

7.2% — one payment

2% — four payments

More than $3 million —10%

9% — one payment

2.5% — four payments

We have some tremendous deals out there at the moment and some are visible on the MLS and some are not.

If you have interest in Turks and Caicos Real Estate, contact one of our agents at RE/MAX ELITE

Given the recently strong exchange rate in favour of the Canadian Dollar versus the US Dollar long side an increased number of flights, we have seen a noticeable increase in the number of Canadians that are enquiring about property in the Turks and Caicos Islands. This is not the only reason.

It is interesting to note that just three years ago, we had a predominant number of Americans who were investing in the Turks and Caicos Islands and then after the collapse of Lehman Brothers and the inevitable commencement of the recession, we witnessed a gradual decline in the number of American buyers and a gradual increase in the number of Canadian buyers. I am British, as it happens and I am from Bradford in the north of England where it is fair to say, caution is exercised before spending any amount of money. However, with any recession, it brings opportunity and in the case of the TCI real estate industry, which has seen significant price reductions, we have a significant number of Canadian buyers that bring welcome cash.

As we find a great majority of American and British people in debt, due to the irresponsible lending institutions that had spent over a decade promoting high loan to value mortgages, we fall upon Canadians whose banks were more rigid in their lending practices and whose same customers now set to benefit from the bargains that lay before them. As we have ofter heard, more Millionaires are created in a recession than any other period and whilst it is only a personal opinion, I would estimate that within this crowd, we will see a good number of Canadians.

Simon Padgett, Broker, RE/MAX ELITE, Turks and Caicos

It is very evident that we are seeing more real estate traffic in the Turks and Caicos and this is an encouraging sign that buyers have recognized that property prices have actually stabilized over the last two to three months, after a fall of approximately 30-35% across the sector.

We are interestingly seeing more developers looking at commercial land and sales of residential land in the TCI, in general are doing slightly better compared to this time last year.

On the condominium front, we see a steady absorption of current stock (not frantic by any means) at reduced prices, compared to say 2007 prices. This is a healthy process, given the level of stock that we had in 2008 and 2009. As this inventory depletes, we shall look for new projects as the typical real estate cycle kicks in to touch once again.

The future of Turks and Caicos Islands Real Estate brings developments such as the Third Turtle Club, a branded Beach and Marina experience in Turtle Cove Marina and the Shore Club in Long Bay Hills.

As we start to progress through 2010, we already see some positive signs of optimism for the real estate industry, which will transcend through to other industries including the construction industry and hospitality.

For Turks and Caicos Real Estate advice, please contact a member of our team at RE/MAX ELITE

Simon Padgett, Broker

Chart for Caribbean Growth Vs. US and Europe

The Turks and Caicos and Caribbean Markets are prime for real estate investment. Recent research shows that the TCI and the Caribbean are ahead of the curve against other regions when it comes to people visiting the islands. Not surprisingly 2009 has seen hotel performance suffer, however, long-term trends have moved in relative sync with their larger feeder markets, the US and Europe. This combined with a move into peak season has seen the first growth rates in occupancy since April 2008. Small revenue increases on this period are also apparent.

Moving forward, analysts are predicting further growth in this final quarter and into 2010 as European, Canadian and Us economies gain momentum.  Most encouragingly these growth rates currently outperform their feeder markets, which is promising news for the region.

More detailed analysis can be found at HotelNewsNow.

So, start looking for your next second home!

RE/MAX Elite has more positive real estate news to report following the latest economic announcements in the U.S.  Close adviser to the president, Warren Buffett, has again gone on record stating reasons for optimism. His opinion holds that there are crucial reasons to believe that America has seen the worst of the economic situation and is now progressing back towards health.

When questioned on current economic prospects Buffet responded that “enormous” progress had been made since this time last year, he attributed this positive state to the government’s actions in in the Fall of 2008. Buffet believes that those actions prevented America’s economy from “going over a cliff”.  Furthermore he went onto state that the worst in this regard is behind us.

He was candid when asked about unemployment, citing that companies confidence would take time to be restored before before this improved.

It doesn’t seem that we are in for a quick recovery, but experts such as Buffett are confident that the fundamentals are strong and that a full return will be made. This is great news for the Turks and Caicos Islands real estate market, which is so closely linked to the fortunes in the north!

Please contact us if we can assist you in in your real estate inquiries as the market returns.

Here in the beautiful Turks and Caicos islands, like in much of the Caribbean, we find our fortunes tied to that of the American Market. So its pleasing to see yet more positive news coming out of the financial site www.bloomberg.com today. Have a look at some more reasons to invest in our real estate market:

Housing starts in the US rose 1.5% to an annual rate of 598,000 last month, taking it to a 9 month high. At the same time, the Federal Reserve Bank of Philadelphia said its general economic index rose from 4.2 to 14.1 in August.

Federal Chairman Ben Bernake has stated his belief that the worst economic depression in seven decades is probably now over, and an unexpected decline in jobless claim is seen as support.

Josep La Vorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York,  went on to offer:  “There is a recovery and it’s going to be sustainable, we just don’t know how fast it is.”

Non-profit groups and households saw their Net worth rise from $51.1 to $53.1 Trillion last quarter. This jump represents the biggest climb in stock prices since 1998. This gain was the first since the third quarter of 2007.

In construction there is also promising signs for our markets here in the Turks and Caicos:

Permits for future construction climbed to a 579,000 annual rate in august. Which is a 2.7% increase. Furthermore, work on multifamily units jumped a massive 25% to a 199,000 rate!

Chief executive of Toll Brothers LTD, Robert Toll, commented: ‘In the last six months, we see a pretty significant change in some markets.” …. People are now concerned with missing the market.”

Please contact out team here at RE/MAX Elite if we can help you with any real estate enquires as we continue to witness slow but steady growth.

The Turks and Caicos real estate market relies heavily on the US economy and this week has seen a number of positive headlines:

Some encouraging news from the US Investor Warren Buffet in relation to the US Economy. Buffet has explained this week that he feels the US markets have bottomed out and only a 9/11 type situation could cause disruption at this time. The CEO of Berkshire Hathaway Inc has stated ‘we are past the critical point’ in an interview with CNBC reporter, Becky Quick.

Meanwhile, Ben Bernanke the US Federal Reserve Chairman has made an announcement this week that he feels that it is “very likely” that the recession is over, albeit the economy will be weak for some time.

According to www.bloomberg.com, US retail sales for August were up 2.7% and this has exceeded economists’ forecasts. One of the reasons is the US government offering its Citizens the ‘cash for clunkers’ program. However, surprisingly, items that exclude auto sales, showed a separate 1.1% increase. This was following overall results in July of 0.2%. Overall, this shows increased confidence in consumer demand.

It is good to be optimistic and read such headlines, however we all must be realistic and accept that we have a reasonable way to go. As President Obama cautiously stated this week “we do not want to be taking the crutches away from the patient too early”

As regards our property market, RE/MAX ELITE has received an increased number of enquiries over the last few weeks, along with several offers for property, so we are boosted by these results and continue to explain to those with cash, that now is certainly a wonderful time to pick up that bargain buy, before somebody else finds it and we start to have an increase in absorption of current stock!

Simon Padgett, Broker of RE/MAX ELITE simon@remax-tci.com

Finally we have some news……. an announcement for the Turks and Caicos Islands that bodes well for our real estate market.

It has now been confirmed that Britain has acquired direct rule over the Turks and Caicos Islands, following a long winded commission of inquiry into allegations of corruption within the government. The constitution has been suspended for two years and the British based governor, Gordon Wetherell , will take immediate control. The governor has made it very clear to the local population (Belonger’s) that they are not taking over, but it is a temporary step to ensure good governance and sound financial management.

The British Foreign Minister stated “This is a serious constitutional step which the UK government has not taken lightly, but these measures are essential in order to restore good governance and sound financial management.”

“It remains our intention that elections should be held by July 2011, if not sooner.

“The governor and his advisors have much to do, but I know that many people in Turks and Caicos Islands will welcome this move and have high expectations for the end outcome.

“I encourage them to work with the governor to rebuild stability and confidence in their territory.”

The Governor then went on to say “Our guiding principles will be those of transparency, accountability and responsibility. I believe that most people in the Turks and Caicos will join with me in welcoming these changes.”

In summary, it would appear that everyone can now look forward to some positive direction for these beautiful islands that are known for their stunning beaches, turquoise water and upscale developments.

In our last blog, we had mentioned the increase in enquiries for our commercial real estate listings. Therefore, with a possible light at the end of the recession tunnel, along with this announcement, one could suggest that it is an ideal time to purchase real estate at prices which are 30% less than they were three years ago. Once again, it’s all about timing!

It is amazing when you look back at previous recessions and the length of their existence. At 34 years old and for anyone else in their thirty’s or less, I am not sure any of us have experienced a recession as long as this or even as bad as this. In speaking with some of my clients recently who are in their mid 50’s, even they are unable to remember a recession like this. In reality, most people are affected, except some are worse than others, so in essence, you will always get a differing view of one persons last memories of a recession, compared to another.

However, one consistently mentioned aspect, from virtually everyone I have spoken to is that for every loser, there is a winner in a recession and that apparently five times more millionaires are created as a result.

Turning to the real estate sector, it is amongst the majority of savvy investors I have chatted with, that there has never been a better time to buy property, than in the final third part of the term of a recession. The reason being is that there are limited number of people with cash and ‘Cash is King’ as they say. Additionally at this stage, you find the most motivated of sellers and you are in the best position possible to negotiate the very best deal.

As an interesting observation, I have  hardly had anyone call me about large commercial parcels of land in the last eighteen months, however in the last eight weeks, I have had a number of enquiries from established developers. Do they know something that we do not?

There are no guarantees in life with anything except death and taxes (although I may add we have no income , capital gains or annual property taxes in the Turks and Caicos Islands) but the best investors take calculated but sensible risks when investing and it’s all about timing!

Simon Padgett, Broker. RE/MAX ELITE, Providenciales simon@remax-tci.com