While the U.S. real estate market cools, resort properties in the Caribbean are still as hot as the islands’ beaches. Retirees and wealthy young executives from the U.S. and Europe are snatching up luxury properties on celebrity-sanctioned islands at record speed, and developers are taking their merchandise on the road to find buyers in New York.
In May, Donald Trump sold $350 million worth of empty lots in four hours at the planned Cap Cana luxury resort on the eastern tip of the Dominican Republic, setting a record for the island. About 5,000 condos and homes, 500 hotel rooms, five golf courses, three schools, restaurants, a medical center, churches and a nature reserve are planned over the next 15 years at the 30,000-acre site.
In June, the Bah a Beach Resort & Golf Club in Puerto Rico put its luxury condos on the market and has since recorded more than $100 million in sales. Estate homes there start at $3.5 million and one-bedroom or penthouse condos at $675,000. Buyers start moving in next year.
In November, developers are coming to New York City to sell new luxury properties at Dellis Cay, a 560-acre private island in Turks and Caicos Islands, British West Indies. About 200 acres on the island will be divided into seven development zones, each designed by a different internationally renowned architect. And developers are betting on plenty of high-end clients from New York City, said Cem Kinay, CEO and president of the O Property Collection, the resort’s developers.
“Our target market consists of people who not only can afford these unique properties,” Kinay said, “but also those who have appreciation for good design and exceptional service.”
In the Dominican Republic alone, more than $2.5 billion worth of real estate projects are under development, F lix Jim nez, the island’s minister of tourism, recently told the press.
Anguilla, a British West Indies territory seeing development that depends heavily on luxury tourism, enjoys an annual GDP growth rate of more than 10 percent, compared to the U.S. growth rate of 3.8 percent, according to the CIA’s World Factbook.
A new U.S. law requiring passports has discouraged some prospective tourists from visiting Puerto Rico, said Jaime Fortuno, executive vice president of marketing for Interlink, one of the developers of Bah a Beach.
But second-home buyers are not as easily deterred, he said. The 70 million U.S. baby boomers are looking for a warm place to retire with plenty of sunshine and access to services.
Young Wall Street executives with thick wallets have found an easy-to-access playground that’s also been endorsed by Hollywood celebrities — Dellis Cay’s buyers, for example, have included Michael Douglas and Catherine Zeta-Jones. Caribbean banks are usually willing to lend purchasers money.
Kinay said he doesn’t predict a credit crunch there anytime soon. The typical buyer in the Caribbean doesn’t have to rely on mortgages to buy property. They have plenty of cash in their bank accounts, he said.
Many wealthy Europeans are also buying property in the Caribbean while the euro is strong, he said. They like that the new developments are upscale with posh amenities, but also more accessible and close to the local culture. That’s a change from the past.
“There’s a more open society today that’s wiling to travel, that does not have to be in a secluded resort,” Fortuno said. “It’s not the same market it was 20 years ago.”