Market in Depth

Saint Lucia is still a buyer's market, despite its beauty and increasing buzz

Lalaine C. Delmendo | September 03, 2019

St Lucia's property market is still recovering at a gradual pace from the global economic crisis more than ten years earlier. Contributing to St. Lucia's slow recovery are extreme weather conditions in the Caribbean including a spate of hurricanes in 2017, the uncertainty caused by the ongoing Brexit negotiations, and the wider global economic slowdown.

Property prices fell 20% to 30% from 2009 to 2014, due to the global crisis. The housing market started to pick up only at the end of 2014.

“The market has been very depressed since the 2008/2009 recession,” said Doubloon Real Estate's Managing Director David Farrin. “It's been a struggle, and each year we think that there's a light at the end of the tunnel, which then tends to go out.”

Overall, the property market remains a buyer's market. “It's a good time to buy, because it is obviously a buyer's market,” added Farrin.

Prices of residential properties in the range of EC$1.1 million (US$407,000) to EC$1.6 million (US$592,000) fell by as much as 25% last year, according to Farrin.

The continued decline in prices has however recently prompted increased buying interest. Farrin noted that his agency received more inquiries in January and February of 2019 than in the first two months in any of the last nine years.

St. Lucia's bustling north is packed with new luxury homes and condominiums, while the quieter south is relatively undeveloped – though that is set to change with the development of a 700-acre mixed-use project in Vieux Fort, according to Walter Zephirin of 7th Heaven Properties. A single-family home can be bought at US$160,000, while villas in high-end resorts are priced at around US$9 million.
  • In The Landings, in Rodney Bay on St Lucia's northwest, two-bedroom condominiums are priced at US$550,000. St Lucia's first residential private yacht harbour, The Landings opened in December 2007. About 70% of buyers are British.
  • In Cap Estate Development, an upscale residential area on St. Lucia's northern coast, a four-bedroom villa in the gated Allamanda community is on the market for US$2.75 million, according to The New York Times.
  • In the Tradewinds Golf Villas development, Gros Islet, high-end villa prices start at US$1.1 million.
  • In Mount du Cap estate, Gros Islet, a three-bedroom luxury home was sold last year for US$2.7 million.
  • Windjammer Landing, Gros Islet, a two-bedroom villa is currently on the market at US$425,000.
  • The Ocean Breeze development on Mount Layau has 78 villas and 70 townhouses. Three bedroom villas are priced at US$765,000, four-bedroom villas at US$930,000.

“Tourism is the engine that drives real estate” in St. Lucia, says St. Lucia Sotheby's International Realty CEO Christos Poravas.

However “it is still very much an up-and-coming destination, a much smaller market in its early stages of development” compared to other Caribbean countries like Barbados, St. Martin and Antigua.

Most foreign homebuyers in St. Lucia come from the United States, Canada, and the United Kingdom.

St. Lucia stay over visitors
In 2018, the total number of visitor arrivals in St. Lucia rose by 10.2% y-o-y to a record high at 1,228,718 people, following growth of 11% in 2017, according to St. Lucia Board of Tourism.

In addition, in January 1, 2016, St. Lucia started to accept applicants to its Citizenship by Investment program, joining Dominica, Grenada, Antigua & Barbuda, and St. Kitts & Nevis. The program was expanded in January 2017 when the 500-applicants cap per year was removed; and in May 2019, a dependent was allowed to make an application for citizenship within five years after the grant of citizenship by investment to a main applicant.


Analysis of St. Lucia Residential Property Market »

Rental Yields

Rental incomes in St. Lucia - poor rental yields, at 3.57%

There has been a modest increase in the average price of houses in St. Lucia this year. Last year’s average house price was US$1,826 per square metre (sq. m.), and this has increased this year by 4%, to US$1,915 per sq. m..

This slight improvement is welcome since in St. Lucia, house prices have been falling since 2009. The most dramatic fall was in 2010, when prices fell for as much as 20%.

Rents have not yet risen with prices. As a result yields are now poor. A 200-sq. m. house earns a rental return of 3.57%, whereas last year, the same house might have earned a rental return of 5.25%.

Read Rental Yields »

Taxes and Costs

Rental income tax is high

Rental Income: Rental income is taxed at progressive rates. Tax rates start at 10% and can go up to 30% depending on the tax base.

Property: Property taxes are levied at a flat rate of 5% of the property’s annual rental value, as determined by the Inland Revenue Department.

Capital Gains: Capital gains are not taxed in St. Lucia.

Inheritance: There are no inheritance taxes in the island.

Residents: Residents must pay taxes on their worldwide income.

Read Taxes and Costs »

Buying Guide

Buying costs are very high in St. Lucia

Round-trip transaction costs, i.e., the total costs of buying and selling a property, range from 11.50% to 21.50%. If the seller is a foreigner, the vendor’s tax is 10%. The seller also pays for the 6% real estate agent's commission. The buyer pays legal fees (0.50% to 2.50%) and stamp duty (2%). Foreigners need an Alien Landholding License to buy landed properties.

Read Buying Guide »

Landlord and Tenant

Tenancy law

Research in progress.

Read Landlord and Tenant »

ECONOMIC GROWTH

Economic slowdown; high unemployment

St. Lucia’s economy grew by just 1% in 2018 from a year earlier, sharply down from expansions of 3.7% in 2017 and 3.9% in 2016, according to the International Monetary Fund (IMF). However the economy is expected to strengthen this year with projected GDP growth of 3.3%, buoyed by construction.

Economic growth in St. Lucia is driven by tourism and construction. Following the robust growth of the tourism sector from 2013 to 2015, tourism dropped in 2016 due to weaker cruise ship arrivals. But tourism recovered quickly, with a significant rise in cruise passenger arrivals combined with strong growth in stay-over arrivals in the past two years.

In 2018, the total number of visitor arrivals in St. Lucia rose by 10.2% y-o-y to a record high at 1,228,718 people, following a growth of 11% in 2017, according to St. Lucia Board of Tourism.

St lucia GDP chart
Out of the total visitors in 2018, around 61.9% were cruise passengers, 32.1% were stay-over visitors, 5.2% were yacht passengers, and 0.8% were excursionists. The stay-over visitors mostly came from the United States (44%), other Caribbean countries (20%), the United Kingdom (19%), and Canada (10%).

St. Lucia’s construction sector slowed sharply last year, mainly due to delays in private and public sector construction projects. The construction sector recorded a steep decline of 17% in 2018, after rising by 10.8% in 2017, 5.1% in 2016 and 14% in 2015, according to the CSO.

Though, the construction sector is expected to recover this year, with the development of several new hotels in the island. Recently, two new high-profile all-inclusive hotels – AMResorts brands Dreams and Zoetry – part of a larger hotel project Canelles Resort, are slated to break ground later this year. Together, the two hotels will consist of 330 rooms and 380 residential units.

The properties will add to a burgeoning hotel pipeline in St. Lucia, from Range Developments’ Black Bay to a new Courtyard Marriott in Castries to a Hyatt-branded 400-room hotel coming to the northwest part of the island.

Inflation accelerated to 1.9% in 2018, up from 0.1% in 2017, -3.1% in 2016 and -1% in 2015.

Unemployment remains high at 20.2% in 2018, unchanged from a year earlier, according to the Central Statistics Office (CSO). Youth unemployment is even higher, at 36.3%.
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