A Change of Direction
- January 29th, 2018
- in PROPERTY
The BVI property market post Irma
Photography courtesy of Smiths Gore
The catastrophic effects of hurricane Irma have made their imprint on BVI history.
With an estimated 70 – 80 percent of buildings damaged by the Atlantic’s most fierce storm to hit the islands, there has been an understandable shift in the property market’s buying and selling projections for 2018.
VIPY sought to grasp the latest information from property agents in the BVI by interviewing Principal Broker of REMAX Bonnie Dougall, Managing Director of BVI Sotheby’s International Realty Maritha Keil, and Lucienne Smith and Bernadette George of Smiths Gore BVI Ltd.
In the aftermath of 2017’s winter anomaly that shook the Territory, the islands are still recovering with the wider economic ramifications under evaluation. Nevertheless, there are some observations formed by the property industry professionals that are significant for residents and potential habitants wishing to gauge the long-term impacts of Irma.
For the most part, BVI realty companies are acknowledging the uniqueness of the event, maintaining an optimism stemming from their individual records and continued liaisons with their client bases.
The Property Market
Speaking to Lucienne and Bernadette of Smith’s Gore Residential they relayed the prediction that purchasers will increase in number once vendors—including the banks—rationalise their position and properties become available on the market. At the moment, a number of owners are still waiting for their insurance claims to be finalised before they decide to renovate or sell “as is.” Lucienne’s assessment emerges from a series of factors that the BVI property market needs to overcome.
The appeal of renovating and/or rebuilding is dependent on the availability of contractors, labour, and materials. Recent challenges include shared demand for supplies with other regions hit by the storms—Puerto Rico and Florida—and the volume of deliveries waiting to clear through the port. “Land Registry and government departments are functioning, sometimes on a limited basis, but the buying cycle could be shortened to encourage a greater number of transactions,” said Lucienne proceeding to explain that some owners who haven’t sustained damage, and who aren’t anxious to sell, have withdrawn their properties from the market while the industry stabilises.
Despite the challenges, Lucienne’s forecasts are optimistic: “There are a number of purchasers currently exploring their options; local residents who have been renting are hopeful of finding a deal and international purchasers are also looking for development opportunities.”
Smiths Gore recorded that the BVI, pre-Irma, had approximately 200 villas for sale (over $500,000), but generated on average 20 sales per year (also for sale over $500,000).Lucienne summarised saying, “The lack of sales in the BVI is a combination of properties being over-priced and the lengthy sales cycle. The storms may adjust both and the market could become much more dynamic going forwards.”
The Buyers and the Sellers
“From what my company has experienced over the past number of months after the storm, the…interest in purchasing…remains strong and many properties are taking sale offers,” said Bonnie of REMAX when reviewing the industry for her company following Irma.
“It currently appears that the average volume of [residential] sales could still be consistent in the overall number of yearly sales,” said Maritha in light of Sotheby’s business since the hurricane. “Previously overpriced homes are becoming more affordable,” she continued, explaining that some properties were on the market for an excessive period after the real estate boom 10 years prior. These homes required renovations to attract buyers at the high prices that they sought and with many property owners awaiting payments from insurance, it’s likely that the astute sellers will use the finance to refurbish, bringing their residence up to a realistic, competitive price-point.
In cases where properties are enduring light repairs, the owners are retaining their asking-price with a number of sale offers taken prior to the storm, continuing for the same price and terms post Irma.
Following insurance claim settlements, some owners will sell their severely damaged properties “as-is” for an exceptionally-reduced price once their insurance settlement has been determined.
“Cash buyers will be favoured in this market as banking institutions will be cautious about financing properties that are too damaged,” added Bonnie. “However, if the buyer can pay cash for the damaged property, most banks will be open to financing reconstruction loans to rebuild the home with the property held as security.”
The BVI Lifestyle
Maritha Keil of Sotheby’s has observed that many patrons of the BVI are entering or re-entering to either rent or buy, because of their continued loyalty for the country and its people.
The residents of the BVI have united to rebuild stronger pumping a heartbeat throughout the land and leaving a positive influence over many. “People all over the world are planning on returning as soon as they can find a place to stay, because they have never felt more at home, more a part of the community and at one with nature, as they do in the BVI,” continued Maritha.
The rate of recovery for the BVI largely depends on the amount of money invested back into repairing and rebuilding the physical infrastructure. “Jobs have already increased for the various builders and contractors who had been struggling with consistent work before Irma,” said the Sotheby’s Managing Director. “Truckers, machine operators, marine technicians, engineers, glass cutters, welders, painters, wood shops and architects are all busy, which is currently bringing a huge boost to the general economy. Those tradesmen and women are now beginning to buy homes again, because they expect years of rebuilding and job security. Predictions on the timing of full recovery seems dependent on the continual and much needed efficient arrival of supplies and materials.”
Maritha emphasised that island residents are proactive, industrious, and sincerely intent on building things sooner than later and better than before. The resilient family-minded culture of the BVI is what will continue to make it a success.
“The underlying problems we had before the storm for tourism must still be addressed, such as better connecting flights, upgraded renovations to some of the outdated resorts, and improved customer services,” said Maritha, but the undeniable fact is the BVI remains beautiful, special, and welcoming to all visitors.