Doug’s View of St. Barths Real Estate – September 2019
It’s been a busy and active summer on St Barths, with islanders wrapping up what, in our view, has to be one of the best seasons ever. It’s incredible to see how far the island has come since Hurricane Irma two years ago.
So, what’s the latest news from the St Barths Real Estate world since my last report? Activity this winter was brisk, with properties at all levels being sold or put under agreement. Records were set, and the inventory of listings has been drawn way down. For a vacation-grade villa, we watched the base price go from 3 to 3.5 million euros in 2018, to 3.5 to 4 million euros in 2019. In our opinion, clients that were looking for something between 5-7 million euros may find they now have to look into the 8.5 range to find something that suits them.
Turn-key villas that most buyers seek are becoming increasingly sparse. On the horizon, while there are various views, I don’t forsee any increase in supply from either speculative builders or homeowners preparing to sell.
Hence, what does this mean for the buyer? Historically, values in the St Barths real estate market rarely go down in times of economic uncertainty; therefore, waiting for any form of global economic downturn to impact pricing may not have much benefit. In fact, our records suggest that St Barths real estate can work as an income producing hedge in times of economic downturn). Furthermore, recent actions by the local government (the Collectivité ). such as requiring more green space per lot, are expected to curtail speculative building and flipping. These factors point to an increase in prices. In our view, today’s best investment is to purchase permitted raw land and build a villa. In general it’s not that painful, but it does take about 2 1/2 years.
If building isn’t your thing, then we suggest you come down to look at properties before the Holiday season starts…before today’s limited inventory decreases further.
The takeaways for this quarter are:
1) There is low inventory of villa listings, without more new supply in sight.
2) The Collectivite is taking actions to slow down the pace of new construction
3) Pricing in the market is projected to move upward, especially for properties below 12 MM euros.
Feel free to give me a call if you wish to discuss the market in more detail at +1-508-221-5527.
Director, WIMCO International Real Estate
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