'Citizenship by Investment Program' to boost the property market in Antigua and Barbuda
August 12, 2015
Antigua and Barbuda’s property market is expected to expand in coming years, thanks to the Citizenship by Investment Program (CIP), recently launched by the government, which offers full citizenship to foreign investors who invest at least US$400,000 in real estate in the country.
Moreover, the opening of a new airport terminal and the construction of several residential developments are attracting foreign homebuyers. The US$45 million Airport Terminal, at the VC Bird International Airport, is expected to be completed within six months, boosting the lucrative tourism and offshore financial services industry.
Antigua and Barbuda is known internationally as a luxury holiday and wedding destination, renowned for its tropical climate and its 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 also now being promoted for family-oriented vacations.
Some construction projects now underway:
- The US$2 billion Singulari development, Antigua and Barbuda’s first mega-resort, is expected to create 1,000 jobs in the country. This 1,600-acre multi-hotel, residential and commercial project is being lauded as a major feather in the country’s tourism cap. Singulari, which spans 900 acres of land in the north of Antigua and 700 acres of tiny islands, 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 US$250 million hotel project on Barbuda to be developed by Hollywood actor Robert De Niro;
- In 2013, the Bau Panel project was launched which consists of around 5,000 homes across Antigua and Barbuda and is expected to cost around US$200 million;
- The construction of a brand new Sandals Beaches Resort, Beaches Antigua, which will be built on the Grand Pineapple Resort, and;
- The construction of South Point, a boutique hotel to be situated in the Falmouth Harbour.
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 in recent years. Two-bedroom houses still average around US$350,000 while three-bedroom and up houses might cost about US$600,000.
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 2014, the economy expanded by a modest 2.4%, after annual real GDP growth rates of 1.8% in 2013 and 3.6% in 2012, and y-o-y declines of 1.9% in 2011, 8.5% in 2010 and 10.7% in 2009, according to the International Monetary Fund (IMF). Economic growth is projected to be 1.9% this year and to 2.3% in 2016.
CIP’s approved residential developments
The following are some residential developments 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 to be 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.|
Interest rates and the mortgage market
Interest rates for residential mortgages in the twin-island state ranged from 6% to 13.5% in April 2015, according to the ECCB. In 2014, the size of the mortgage market contracted slightly to about 23.8% of GDP, the lowest in five years, according to the East Caribbean Central Bank (ECCB).
In the first quarter of 2015, loans for house and land purchase dropped 6.3% y-o-y to XCD244 million (US$90.4 million) while loans for home construction and renovation declined slightly by 0.2% to XCD550.7 million (US$204 million) over the same period.
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 there is limited number of properties available for purchase. Most properties available 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.
Browne’s flagship housing project
Prime Minister Gaston Browne recently announced 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.
“Rather than sell [the homes] with a profit built in… the building is constructed and sold without that additional cost,” said government’s chief of staff Lionel Hurst. “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,” Hurst added.
In 2014, the economy expanded by a modest 2.4%, after annual real GDP growth rates of 1.8% in 2013 and 3.6% in 2012, according to the International Monetary Fund (IMF). Economic growth is projected to slow slightly to 1.9% this year and to 2.3% in 2016.
Tourism accounts for about 60% of GDP and 40% of investment in Antigua and Barbuda. In 2014, stay-over visitors rose by 2.5%, but this was balanced by a 1.5% y-o-y drop in cruise ship passengers, so that there was a 0.7% decline in total visitors to 799,661 persons. Visitors from the U.S. accounted for 38% of the total number of stay-over visitors in Antigua and Barbuda in 2014, followed by Britons (29%), and Canadians (11%).
In Q1 2015, total visitor arrivals were up by 11% to 405,670 persons from the same period last year.
From 2003 to 2007, the country’s GDP grew an average of 6% a year and reached over 12% in 2006, mainly due to a tourism and construction boom as the nation prepared to host the Cricket World Cup. However, during the global economic and financial crisis the economy contracted by a huge 10.7% in 2009, by 8.5% in 2010, and by another 1.9% in 2011.
National debt is almost 90% of GDP.
Prime Minister Gaston Browne, who took office on June 12, 2014, is determined to transform the country into an economic powerhouse.