More realistic demands from sellers for luxury property prices in the British Virgin Islands have led to a strong market recovery, according to one real estate firm.
Analysts say that in early 2011 the price for luxury homes remained flat but then picked up during the year as asking prices were reassessed to more realistic levels which then caught the attention of property buyers.
The increase in interest has led to 2012 sales being recorded as ‘strong’ and remaining healthy through this year.
Christian De Meillac, from real estate firm Knight Frank, says: “With limited supply and strong demand prices are being supported.”
He added that the boom in sales is being led by European buyers particularly among yachting enthusiasts keen to buy property with moorage.
Slump in tourism
This demand for waterfront property means that buyers are flocking to the islands of Virgin Gorda and Tortola.
The result is that there are strong sales for properties around the £650,000 mark even though there is a year-long permit process for overseas buyers.
Property analysts say that while the market is strong at the lower end of luxury properties those priced between £650,000 and £3.2 million are struggling to sell.
However, one issue facing the British Virgin Islands is its slump in tourism which began in 2008 with government with figures showing that there was nearly a 20% drop cruise passengers between 2011 and 2012 from 484,715 to 390,579.
In a bid to reverse the decline, BVI Prime Minister Dr Orlando Smith has proposed building a new port which would accommodate bigger cruise ships.
Belongers get first chance to buy
Despite the fall in tourism, the British Virgin Islands have one of the most prosperous Caribbean economies and in addition to tourism its biggest money earner is its financial services sector, being ranked 37 in the world’s top 69 leading international financial centres.
Property Investors are fairly confident about the future for the Islands and this has seen the price for land to develop growing steadily though the Islands are still relatively undeveloped. Prices for land range from £64,000 for undeveloped plots to £323,000 for those which have been developed.
Rents are still at high levels for luxury three bedroom villas in Tortola commanding between £2,000 and £2,500 per month.
Investors keen to buy property in the islands must first obtain Non-Belonger Land Holding License if they are from overseas which takes a year to attain and covers developed and undeveloped properties.
Since residents on the British Virgin Islands, or ‘belongers’ as they are known, have first choice of any property being sold, all properties must be advertised locally for four weeks before being sold to an overseas buyer.
