Improved tourism and a better economic outlook in the Bahamas is creating conditions where property prices are expected to rise and the number of transactions grow, it is claimed.
Although there are no official house price figures, values are estimated by local agents to have dropped by 30% to 40% from 2007 to 2010 and but they are now starting to recover and sales volumes are picking up, according to Luke Smith, managing director of Crystal Investment and Real Estate.
He pointed out that the Bahamas is expecting double digit growth in visitor arrivals for 2014 and with a mature tourism infrastructure supporting approximately 1.5 million stopover visitors and 3.5 million cruise visitors per annum along with a progressive service industry, tourism has become the largest driver of the economic activity in the Bahamas.
Moreover, with recent new investments such as the Atlantis Phase III, the Baha Mar Development Company in the Cable Beach strip, and a number of projects planned for the Family Islands, the tourism industry is poised for exponential growth and development.
‘A major contribution to the recent growth in the overall Bahamian economy is Kerzner International's Atlantis Resort and Casino, which took over the former Paradise Island Resort and has provided a much needed boost to the economy. The islands' zero rate income tax, capital gains tax, wealth tax and VAT is clearly luring wealthy foreign investors looking to avoid spiralling tax burdens overseas,’ explained Smith.
‘The Bahamas’ tax situation is very attractive to foreigners, many of whom choose to become residents. There are no taxes on income, sales, estates or inheritances and there is no capital gains tax on real estate,’ he said.
‘Foreigners who own properties in the Bahamas are eligible for a home owner’s residence card which is renewable annually and those who purchase properties valued at least US$500,000 are given priority in permanent residence applications,’ he added.
However, property does not need to be that expensive. There are one and two bedroom beach cottages in the Bahamas Rum Cay project that start at £81,500. The development is part of the Ocean Hotel and Spa Resort Bahamas Rum Cay and the beach cottages are located on the beach front with sea views and offer an ROI of 41 to 50%.
Smith said that a deposit of £1,000 is needed to secure a unit and there are 70% deferred payments over five, 10 and 15 years. Also on offer is a 13% rental return and five year buy back package. The Hotel and Spa resort will be completed 2015 and investors will be entitled to 90 days personal usage.
According to the firm the absence of official property price statistics should not put people off buying. ‘Financial statistics only go so far. The best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent. Renters who can afford a high rent can afford...