Rental & Sales Market Review Q1 2020
Rental Market Review Q1 2020
Achieved Rent Metrics Q1 2020
Achieved Rent Metrics Q1 2020 14,000
• 1 bedroom rates become less competitive at +$2,000/month as 2 bedrooms become available in this range. • The highest rates are achieved within lifestyle communities or along the beachfront. • The lack of luxury villas which would have theoretically command high rental rates = low max rates achieved - there just weren’t any to rent. • There is strong demand for 4 - 6 bed homes in the luxury segment of the market but low supply which ensures higher achieved rental rates. • Other factors leading to higher achieved rates include location, security and additional amenities such as pools & gyms.
Achieved Rent (BDS)
12,000 10,000 8,000 6,000 4,000 2,000 0
1 Bed
3 Beds
2 Beds Min
Avg
4 Beds
Max
Residential Rental Rate Range
RESIDENTIAL RENTALS FOR Q1
• Rentals ranged from $1,000 to $11,750 with an average cost/room of $1,867 in Q1 2020. • There were no trophy rentals in Q1 2020 but the average rental rate achieved was slightly above the same period in 2019.
YEAR
MIN
MAX
AVERAGE
Y.O.Y TRANSACTION CHANGE
2019
$1,200
$17,000
$4,608
-
2020
$1,000
$11,750
$4,694
-10%
Q1 Rentals by Property Type Q1 Rentals by Property Type 2019
68%
2020
19%
51% 0%
10%
20%
30%
Apartment
14%
32% 40%
50%
House
60%
70%
17% 80%
90%
100%
Townhouse
• There was a surge in demand in Q1 2019 for apartments as a result of ROSS University personnel and students relocating to the island. • At the beginning of 2020 we saw a shift away from apartments toward houses & townhouses. This was driven by corporate families relocating to Barbados, ROSS students choosing to move into houses with their families, as well as an increase in rental requests from people with pets. • Demand for rentals has continued to be strong in Q1 2020 considering the inflation in transactions which would have resulted the year earlier due to ROSS.
Commerical Rental Rate Range COMMERCIAL RENTALS FOR Q1
Residential
YEAR
MIN
MAX
Y.O.Y TRANSACTION CHANGE
2019
$1,000
$6,426
-
2020
$1,400
$15,167
-50%
• In Q1 2019 we secured 10 rentals vs just half of that in 2020. The high number in 2019 was driven by demand for retail/ restaurant space at Coverley town square resulting from ROSS students being housed within this development. • In Q1 2020 demand for rentals was primarily for office space, with just one retail rental. • Barbados now has low personal income tax rates and the lowest OECD-compliant corporation taxes in the world (between 1% - 5.5%). As a result, we have seen an increase in the number of Canadian and UK clients especially, relocating to Barbados with their families and renting corporate offices.
Somerley, Worthing, Christ Church, BB15009, Barbados Tel: +1 (246) 434-9000 terracaribbean.com
Commercial
Speightstown
Holetown
Bridgetown
Oistins
Residential & Commercial Tenants • Residential rentals are concentrated around the West & South Coast as most tenants prefer to be close to work, amenities, beaches and schools. • Expat corporate rentals are often located within lifestyle communities on the South and lower West Coast due to their office location and company guidelines. • Commercial rentals tend to be concentrated in the Belleville and Bridgetown area but we have seen a migration pattern towards Warrens and Welches in recent years as those business hubs expand.
Sales Market Review Q1 2020
Average Sale Price For Residential Properties By Parish
Average Achieved Sale Price by Parish Q1 6,000,000
St. James continues to command the highest price on the island, followed by Christ Church. However there is evidence of emerging demand for property in St. Peter.
5,000,000 4,000,000 3,000,000 2,000,000
Residential Sales By Property Type
1,000,000 0 Christ Church
Saint George
Saint James
Saint Michael
2019 Avg. achieved sale price BDS
Saint Philip
Saint Peter
Saint Thomas
2020 Avg. achieved sale price BDS
Houses continue to be in the highest demand making up 77% of sales in Q1 2020. 63%
2019 2020 20%
20% 2 BED
35% 4+ BED
45%
3 BED
Discount To Sales Price Range For Residential & Commercial Including Land
15% 40%
House
Demand is highest for 3 bedroom residential properties. 35% of residential sales achieved were for 4 plus bedroom properties. 20% were 2 bedroom and no 1 bedroom sales were closed during this period. It is important to know the demand for rentals when investing; take a look at our rental report for Q1 2020 for more details.
32%
77% 0%
Residential Sales By No. Of Bedrooms
5%
60%
Townhouse
80%
8% 100%
Apartment
Sales Price Range For Residential & Commercial Including Land ACHIEVED SALE PRICE YEAR
MIN
MAX
AVERAGE
2019
$98,000
$4,925,000
$622,000
2020
$89,000
$9,500,000
$1,600,000
• The luxury buyer returned in late 2019 and this continued into Q1 2020 as evidenced by the sale of a number of West Coast villas. This has driven average achieved sales prices up for this period. • The market for land priced above $200k continues to be very low.
Build Land
Speightstown
ACHIEVED SALE PRICE YEAR
MIN
MAX
AVERAGE
2019
0%
29%
5%
2020
0%
21%
6%
• Many sales were achieved in both 2019 and 2020 with no discount off of the asking price. This was primarily for sought after land developments like The Grove and South View catering to the local middle market. • While maximum discounts from listed sale price were in the 20% plus range the average discounts over the period were close to 5%. In recent times vendors have become more realistic about the list price for their properties bringing them more in line with the market.
Somerley, Worthing, Christ Church, BB15009, Barbados Tel: +1 (246) 434-9000 terracaribbean.com
Holetown
Bridgetown Oistins
Sales Locations KEY OBSERVATIONS
• Barbados now has low personal income tax rates and the lowest OECD-compliant corporation taxes in the world (Between 1% and 5%). With corporation tax slashed from 30% to as low as 1% for profits in excess of $30m. • We have seen an increase in interest from the UK since the uncertainty of Brexit seems to have settled and as the Corporation Tax was reduced, Barbados became more appealing as an international business hub.
CONTRIBUTORS:
Emma Huston
Betty Cathrow
Somerley, Worthing, Christ Church, BB15009, Barbados Tel: +1 (246) 434-9000 terracaribbean.com