5 June 2008

Barbados and the credit crunch

With the much talked about credit crunch continuing to dominate the news investors may wonder if buying property overseas is still the best option. There is no doubt that the days of 90% mortgages are behind us for now and some banks are indeed cutting back on lending for overseas purchases, but this doesn’t deter from the pure capital growth on your investment that we still are seeing in the Caribbean markets.

Barbados is one such country and has remained largely unaffected despite its currency being linked to the USA markets. Barbados is playing a leading role in the Caribbean and is proving to be a valuable investment going forward. Second home ownership here is proving more and more popular especially among the rich and famous. Indeed there are plans afoot by the local government to further increase foreign ownership to help boost the economy and tourism of the country whilst maintaining the beauty and landscaping of its coastline.

Capital growth of property in Barbados has consistently risen over the last 10 years making it one of the few locations in the World where any financial crises seems to bypass it.

Local demand for rental property is often higher than the UK and Europe as there is not the competitive buy to let landlord markets seen elsewhere. Buying property in Barbados to rent seems to be a captive market and because of the restrictions on future building land is at a premium and therefore the opportunities are limited. This in itself makes for a unique market and one which is thriving for those wishing to invest here.

Once the credit crunch becomes old news and the banks start competing for business again, lending will return to competitive rates and the borrowing markets will dominate once more.