Beachside branded residences point to a transformed Caribbean
Making sense of the latest trends in property and economics from around the globe
3 minutes to read
Take a stroll on the white Bahamian sands of Cable Beach, and you’ll spot one of a new breed of luxury developments sprouting up on the island.
The Rosewood Residences at Baha Mar, a few hundred meters from the water, offer condo owners all of the amenities of the neighbouring five-star hotel, without ever having to check out. A few miles away, you’ll see another. The Ocean Club from the Four Seasons offers potential buyers a mixture of apartments, penthouses and villas, surrounded by ‘Versailles- inspired gardens’ on an eight-kilometre stretch of Paradise Island’s picturesque beach.
The developments are the clearest signs of the pandemic’s impact on Caribbean property markets. Like many markets with fantastic weather, abundant natural beauty and light-touch tax regimes, buyers untethered from five-day-a-week office jobs in global cities have flocked to purchase properties. Prices have surged, and standalone homes have, on average, doubled in value since 2020.
Buyers are now baulking at the prices and transaction volumes have slowed. To find out what happens next, see our new Caribbean Market Insight report, in which we take deep dives in the Caribbean's most important property markets, including the Bahamas, Barbados and Mustique.
For the housebuilders, inflation is back
Vistry issued a profit warning on Friday and provided an update on some issues it previously reported within its South Division - you can see the details here. It's update on the macro outlook for the market mirrored themes shared by Persimmon earlier in the week, namely that sales rates are improving but it looks like build cost inflation will hamper the recovery through 2025.
Persimmon said it had started to see signs of cost inflation emerging in price negotiations for next year, before adding that it expects costs to be inflated by new building regulations and employer national insurance increases announced in the Budget. Vistry said the impact of those NIC increases will be about £5m in the full year 2025, and that it will be felt through its supply chain.
Trading conditions have improved markedly compared to last year. Vistry's average weekly sales rate climbed 42% to 1.02 in the year to November 8th. Meanwhile, Halifax on Friday said average UK house prices ticked up 0.2% in October to hit a fresh high, surpassing the previous peak set in June 2022.
The dust settles
Average prices in prime central London fell 1.8% in the year to October, the narrowest decline since November 2023, according to Knight Frank data out this morning. Meanwhile, prices in prime outer London rose 0.8%, which was the biggest increase since May 2023.
We collected this data before the events of last week, which could have an impact in the months ahead. Tom Bill picks over the implications of both the Budget in and the US election on London's prime sales and rental markets this morning. In a similar fashion, Stephen Springham unpicked the Budget's 'triple whammy' for retail on Friday.
The team go into even greater detail in a new edition of Knight Frank's Intelligence Talks podcast, hosted by Anna Ward.
In other news...
Bank of England must look past budget's temporary inflation hit, BoE chief economist says (Reuters), UK landed estates warn Budget tax changes will ‘kill off’ business (FT), inflation worries seep back into US bond market (FT), Trump will bury ESG (Bloomberg), and finally, Bitcoin hits a new record (Bloomberg).