Antigua and Barbuda’s property market rebounds as investments pour in
July 28, 2016
The property market has recovered. Construction is everywhere.
The government has successfully attracted foreign demand through its Citizenship by Investment Program (CIP), offering full citizenship to foreign investors who invest at least US$400,000 in real estate. New residential developments are multiplying, and a new airport terminal is boosting tourism and offshore financial services (the US$45 million Airport Terminal, at VC Bird International Airport, became operational in August 2015).
Antigua and Barbuda is renowned as a luxury holiday and wedding destination. It has 365 beaches – one for every day of the year. With gorgeous views, landscape and good property values, it is an ideal location for a second home, attracting celebrities like Oprah Winfrey, Giorgio Armani, Richard Branson and Eric Clapton. It is now being promoted also for family-oriented vacations.
An amazing number of construction projects are underway - amazing, given that the islands´ population is only 92,000:
- The US$2 billion Singulari development, Antigua and Barbuda’s first mega-resort, is expected to create 1,000 jobs. This 1,600-acre multi-hotel, residential and commercial project is being lauded as a major feather in the country’s tourism cap. Singulari spans 900 acres of land in the north of Antigua and 700 acres of tiny islands. It includes several luxury hotels, hundreds of private homes, a school, hospital, marinas, golf courses, an entertainment district, horse racing track and the Caribbean’s biggest casino.
- A new residential complex with over 200 condominium units costing US$400 million is expected to open next year.
- Sandals Resorts International (SRI) is expected to build a new 250-room hotel in Dickenson Bay, next to the Sandals Grande, and will begin building Beaches Resort this year;
- Sunwing Travel Group is developing a 500-room resort under the Royalton Luxury Resorts brand at Deep Bay, Antigua.
- A high-end residential development is being built on Maiden Island.
- A hotel resort is being built on Pelican Island.
- Replay Resorts intends to build a five-star hotel at Half-Moon Bay later this year.
- A new hotel resort at Long Bay will commence construction in the last quarter of this year.
- Yida International has started building 50 three- and four-bedroom villas on the mainland as part of the Guiana Island development project.
- A US$250 million hotel project on Barbuda is being developed by Hollywood actor Robert De Niro.
- The Bau Panel is building around 5,000 homes across Antigua and Barbuda at a cost around US$200 million.
- A brand new Sandals Beaches Resort will be built on the Grand Pineapple Resort.
- South Point, a boutique hotel, is to be situated in the Falmouth Harbour.
- There is also continued development of resort and residential tourism projects at Pearns Point, Harbour Island, Hodges Bay Club, Morris Bay, and Tamarind Heights.
There are no official house price records in Antigua and Barbuda, and reliable information is hard to come by. But based on recent research by the Global Property Guide, not a lot has changed recently. Two-bedroom houses still average around US$350,000 while three-bedroom and up houses might cost about US$600,000.
The tourism sector only fully recovered last year.
During the boom years, house prices in Jumby Bay increased 60% to 100%, according to the Global Property Guide. However, the market was hit by the global financial crisis in 2008, halting the construction of several residential developments. Tourists stayed away – and since the nation’s economy is largely driven by tourism, real GDP went down and construction and foreign direct investment declined.
In 2015, the economy expanded by a modest 2.15%, after GDP growth rates of 4.2% in 2014, 1.5% in 2013 and 3.6% in 2012, according to the International Monetary Fund (IMF). Economic growth is projected to be 2% this year, and 2.4% in 2017.
Citizenship for Investment Program approved residential developments
The following residential developments have been approved by the government for the Citizenship by Investment Program:
- Daniel Bay, by Blueprint Development – set across 3.5 acres of prime, beachfront land situated within picturesque Willoughby Bay, on the southeast of the island. Only five luxury villas, with sizes between 5,000 and 9,000 square feet (sq. ft.) are built, with prices ranging from US$2.5 million to US$4.5 million.
- Nelson’s Retreat, by Blueprint Development – this boutique style development in the English Harbour comprises six ultra-modern apartments with unrivaled views of the historic Nelson’s Dockyard. The first-floor one-bedroom apartments are priced at US$695,000. The second-floor two-bedroom apartments are offered for US$975,000 while the third-floor two-bedroom apartments are priced at US$995,000.
- Nonsuch Bay Resort and Residences - located at the most eastern point of Antigua just 30 minutes from V.C Bird International airport outside Freetown, this five-star resort has some high quality apartment and villa accommodation in Marina Residences (188 one-bedroom fully-serviced suites), Hilltop Villas (26 plots for private villas ranging from 0.4 to 1.1 acres), Ayers Creek Residences (15 waterfront residences), and 64 hillside apartments and 8 beachfront cottages. A one-bedroom suite within Marina Residences is priced at US$400,000.
- South Point, by ROLS Limited - a boutique condo hotel in the yachting community of Falmouth Harbour, in St. Paul’s, Antigua. The development has five residential buildings housing 20 one-bedroom apartments and 3 two-bedroom penthouses. The prices of the apartments range from US$865,000 to US$885,000, while the penthouses are offered at US$1.9 million.
- Tamarind Hills, by Island Heights Limited – freehold villas, townhouses and apartments within a five star beachfront resort on Antigua’s glorious west coast. House prices range from US$475,000 to US$2.75 million.
Other approved residential developments under the Citizenship by Investment Program:
|Callalloo Project||Al Caribi Developments Antigua Ltd||Morris Bay, Old Road, St. Mary’s, Antigua|
|Antigua Yacht Club Marina Resort||Carlo Falcone||English Harbour, St. Paul’s, Antigua|
|Blue Waters Beach Hotel||Carib Holdings LTD.||Soldier Bay, Antigua|
|Ocean Grand||Corbkinnons Limited||Dickenson Bay, Antigua, W.I.|
|Pigeon Point||Galley Bay Heights||Falmouth, St. Paul’s, Antigua|
|Hermitage Bay Antigua||Hermitage Bay Hotel Limited||Jennings Extension, St. Mary’s, Antigua W.I.|
|Long Bay Hotel||Jiahao Investment (Antigua & China) Limited||St. John’s, Antigua|
|Jolly Beach Hotel & Spa||Jolly Beach Corporation||Bolans, St. Mary’s, Antigua|
|Tranquility Bay Antigua||Jolly Beach Vacations||Jolly Harbour, St. Mary’s, Antigua|
|BluPearl at Hodges Bay||JSN Development Group Limited||Hodges Bay, St. George’s, Antigua W.I.|
|Colibri Court (project), Jolly Harbour Marina Village||KDI Development Limited||Bolans, St. Mary’s, Antigua|
|Emerald Springs Villas||Kenneth and Hilda Meade||Browns Bay, St. Philip, Antigua|
|Coconut Beach Club & Resort||Leisure World Properties Limited||Yeptons Estate, St. John’s, Antigua|
|Passion Village||Macy Limited||Valley Church, St. Mary’s, Antigua W.I.|
|Sugar Ridge Villas||Mongoose Developments Limited||Tottenham Park, St. Mary’s, Antigua|
|Dieppe Bay Villas||Naple Developers Limited||English Harbour, St. Paul’s, Antigua|
|The Peninsula||Nimbrick Limited||Willikies, St. Phillip’s, Antigua W.I.|
|Antigua Yacht Club Marina||Ondeck Living Limited||Falmouth Harbour Marina, Antigua|
|Pearns Point, The Reserve & Hotel||Orange Ltd||Jolly Harbour, St. Mary’s, Antigua|
|Light House Bay Resort||Palm Beach Holding Company Limited||Codrington, Barbuda|
|Papaya Hotel & Spa||Rendezvous Bay Real Estate Corporation||Rendezvous Bay, Antigua|
|Pleasure Cove Resort||Ritcil Company Limited||Runaway Bay, St. John’s, Antigua|
|The Villas at St. James’s Club||Segarva Limited||Mamora Bay, St. Paul’s, Antigua|
|Harbour Island Residences||Stanhope Shepherd Limited||Jolly Harbour, St. Mary’s, Antigua|
|Elias and Salem Hadeed, Trafalgar Beach Resort||Trafalgar Beach Resort||Hideaway Beach, Yeptons, Antigua|
|Verandah Estates||Verandah Estates Limited||Long Bay, St. Phillip’s, Antigua, W.I.|
|Buccaneer Cove Development||Waterfront Properties Limited||Dickenson Bay, St. John’s, Antigua|
|Hibiscus and Flamboyant Villas||Whitegate Development Projects||St. Mary’s, Antigua|
|World of Indulgence Villas, Nonsuch Bay Resort||World of Indulgence||Hughes Point, St. Phillip, Antigua|
|Maiden Island, Crump Peninsula||Yida International Investment Antigua Ltd.||Guiana Island, Crump Island, Antigua, W.I.|
Buying property in Antigua and Barbudas
Foreign buyers are required to apply for an Alien’s Land Holding License, which usually takes up to four months to be approved. The license cost is about 5% of the value of the property being purchased. Buyers are required to pay 2.5% stamp duty on property transfers.
As the country is small and mountainous, development is restricted and only a limited number of properties are available. Most are freehold. Land can be bought or leased from the government, which owns 55% of land in Antigua, or the private market (land ownership in Barbuda is prohibited).
Mortgage market shrinking
In 2015, the size of the mortgage market contracted to about 21.9% of GDP, down from 23.7% of GDP in 2014, according to the East Caribbean Central Bank (ECCB).
In the first quarter of 2016, the total outstanding loans for the acquisition of property dropped 4.9% y-o-y to XCD755.93 million (US$280 million), according to the ECCB.
- Loans for house and land purchase dropped 5.8% y-o-y to XCD230 million (US$85.19 million)
- Loans for home construction and renovation declined by 4.5% y-o-y to XCD525.9 million (US$194.8 million)
Interest rates for residential mortgages in the twin-island state currently range from 6% to 13.5%.
St. Lucia’s currency is pegged to the US dollar at XCD2.7 to US$1.
Tourism accounts for about 60% of Antigua and Barbuda´s GDP, and 40% of investment. In 2015, visitor arrivals surged 13.8% to 909,660 people, according to the Antigua Statistics Office, with a 21.1% rise in cruise ship visitors but only a 0.5% rise in stay-overs. The economy expanded by 2.15%, after GDP growth rates of 4.2% in 2014, 1.5% in 2013 and 3.6% in 2012, according to the International Monetary Fund (IMF).
The islands achieved super-rapid growth from 2003 to 2007, when GDP grew an average of 7.2% a year and reached over 12% in 2006, due to a tourism and construction boom as the nation prepared to host the Cricket World Cup.
However, during the financial crisis the economy contracted by 10.7% in 2009, by 8.5% in 2010, and by another 1.9% in 2011. The country’s gross debt has soared, reaching 102% of GDP in 2015, up from 87.1% in 2012.
In Q1 2016, stay-over visitors were up by 13.5% - a good omen for the future. Visitors from the U.S. accounted for 38% of stay-over visitors in 2015, followed by Britons (31%), Caribbeans (11%) and Canadians (9%).
Browne’s flagship housing project
Prime Minister Gaston Browne, who took office on June 12, 2014, is determined to transform the country into an economic powerhouse. He also announced that the government will build 1,000 subsidized homes during Labour’s first term. The homes, which have market value of US$300,000, will be sold for just US$200,000. The government is also expected to offer homebuyers the option of low-interest mortgages from the Antigua and Barbuda Development Bank and commercial banks.
“If they were placed on an open market the cost might be $300, 000, but since there is no cost built into the construction, and that the land is sold as the barest minimum, then the cost to the purchaser is greatly reduced, and that is called subsidized government housing,” said the government’s chief of staff Lionel Hurst.
In July 2016, Browne unveiled a social housing development in the Villa and Point Communities, in partnership with the government of Mexico, which will provide a US$5 million grant. Two, three, and four-bedroom duplexes will be built.
“The people of Point and Villa have been very patient in their wait for improved housing and now that wait has come to an end. Within the next five months, work will begin on the construction of several multi-floored duplexes for the residents of Booby Alley,” said Browne.