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Barbados Real Estate
Barbados was discovered by Portuguese explorer Pedro Campos in 1536, when he named the island Os Barbados (“The Bearded Ones”) which was subsequently shortened to Barbados. The Island is located just off the coast of South America, with Venezuela the nearest major neighbour. The island of Barbados is situated in a group of islands which include the tourist havens of Saint Lucia, Saint Vincent, Trinidad and Tobago. Barbados itself is part of the Lesser Antilles, with a land area of 430 square kilometres (23 kilometres wide and 34 kilometres long at the widest points). It offers a relatively flat landscape, which rises slightly in the centre of the island - offering beautiful views of the beaches.
While the island has a tropical climate, which is very attractive to the tourist industry, there is a rainy season from June to October, although thankfully the country is situated just outside of the infamous hurricane belt. Barbados itself has one of the highest literacy rates in the developing world, not to mention one of the highest standards of living. The make-up and culture of the island is heavily influenced by the British who have had a presence there for some time - indeed it has become a holiday paradise for many well known British entrepreneurs.
The capital of Barbados is Bridgetown, which is a thriving area of immense tourist activity, and also has the main airport on the island. The overall population of the island is only 279,000 and while the majority of the islanders are native Barbadians, there are a small number of foreign residents. Under heavy British influence, the main sport of the island is cricket with Barbados introducing a number of famous cricketers to the world, including Garfield Sobers and Frank Worrell.
Due to the size of the island and nature of the country's economy, demand has been historically high for property in Barbados. Fuelled by a massive increase in tourism activity over the last decade, prices have been pushed higher and higher. While there have been a number of localised “property bubbles” over the years, these tend to be only short term situations.
The government of Barbados take a fairly hands on approach to controlling and ensuring that areas such as the general property market are not pushed artificially high, and do not “over heat”. While interest rates have remained fairly steady for sometime, with very few short term spikes, the authorities are quick to take action (normally by increasing interest rates) where appropriate.
As you would expect of a country which depends to a large extent on tourism, situations such as the terrorist attacks of 9/11 can have a major short term impact. While the economy was effected in the aftermath of 9/11, the Barbados property market remained fairly resilient on the whole.
Activity in the Barbados property market is visible all over the island, although there is particular interest in areas such as Bridgetown, where many multi-national companies have added their presence. This has pushed the demand for rented property to new highs, as new companies look to house their staff. Overseas developers need to obtain permission from the authorities, although this is fairly straight forward without any major issues.
Why Invest in Barbados
Barbados offers a number of incentives for overseas property investors, mainly the quality of the properties, active market place and presence of a westernised culture (heavily influenced by the British). While the island does not operate a full “free market” economy (with some areas of industry still working to a set fee structure) there are plans to change this in due course.
The government have shown in the past that they are willing to take difficult and sometimes unpopular decisions in order to retain the long term improvement in the economy. The beautiful landscape, excellent infrastructure and relaxed life style of the locals adds to the overall attractions of the country, demonstrated in a very buoyant tourist industry.
As with a number of smaller island in the West Indies, they hold great attraction for many of the worlds rich and famous, with the area constantly in the news. Barbados property is currently in vogue as the country gets ready to host the 2007 Cricket World Cup, which has resulted in the redevelopment of the famous Kensington Oval, and improvement in the islands infrastructure.
On the downside, due to the fact that not all trade has been opened up to the “free market” philosophy, the legal charges and taxes related to property transactions are higher than you might expect. While this has not dented the strength of the property market in Barbados in any way, it is better to be aware of such detail prior to considering the area.
The run up to the 2007 Cricket World Cup is causing a major stir in Barbados, evidenced by the increase in development. While normally the effect of such events would be localised, due to the size of the country there will be an impact on the overall economy. The country is already seeing a significant increase in interest from tourists, which increases the island’s profile above and beyond 2007.
The considered approach taken by the local government is a breath of fresh air, for an area which has often been subject to loose economic controls. When you also consider the relatively low level of interest rates, and inflation, and increased spending on local amenities, you have the makings of a strong long term economy. This type of stable environment is ideal when trying to forecast potential returns for the future.
While the millionaire properties receive the majority of the limelight, the effect is starting to ripple through the whole island, as people attempt to spot the next lucrative opening. As demand continues to far outweigh supply, there will always be a strong backbone to property market, which is further strengthened by the demand for local rented accommodation for overseas workers. The government have also shown a willingness to reinvest into the islands facilities ensuring plenty of attractions for overseas investors.
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Travel Part B