The Covid 19 pandemic has caused great disruption globally, impacting almost every individual and facet of life. The natural beauty of the BVI has sustained those of us lucky enough to live here during these challenging times and many further afield have been drawn to this calm and beautiful archipelago. Since the start of the pandemic we have seen a month on month increase in demand for properties here in the BVI. Enquiries are coming from all over the world from clients wanting to invest or visit for an extended period, attracted by the BVI’s tranquility, beauty and low density environment.
Driven by this demand BVI real estate has been buoyant with buyers expressing interest across all price points. The local market has also seen a resurgence, stimulated by the waiver of stamp duty for belonger buyers. Much of this interest has already translated to sales and our Commercial and Residential Sales team have secured a number of significant sales post lock down with a number more in the pipeline. Land sales have also gained momentum with some banks offering 100% mortgages and our lead article below looks in detail at this dynamic and often overlooked marketplace. Other sectors have not been so resilient and the charter industry as well as shops, bars and restaurants are counting down the days until we reopen and our piece on Staycations looks at how this has thankfully been providing some much needed economic support.
For most of the summer months The BVI were Covid free, achieved by a very proactive government and a community determined to flourish. Whilst masks and social distancing have been mandatory since the early summer we have also been able to enjoy a high level of freedom and movement. Residents returning were subject to a fourteen day quarantine and discussions were underway about how best to fully open up the borders. However those plans were delayed at the BVI tackled a resurgence of Covid-19 in late August. A positive test followed by contact tracing suggested that there had been illegal entry from the USVI and with new restrictive measures in place (see the Covid timeline below) it thankfully appears to be closely contained one more.
We are delighted to share that late yesterday it was confirmed that our borders will open on the 1st December 2020. We are thrilled and if you are here in the BVI or in the States, Canada, Europe, Asia or further afield, we are thinking of you wherever you are and for those further afield we are looking forward to welcoming you back to the BVI very soon.
BVI Land Sales Analysis
A comprehensive and illuminating overview of land values and sales activity for the period 1st January 2018 – 31st August 2020
Residential lot sales are a significant part of the residential real estate market in the BVI. Since the beginning of 2018, residential lot sales have made up over 40% of residential real estate sales, totaling approximately $56.7M in value. Almost 70% or $39.1M of those sales occurred in just 11 transactions in the high value estates of Oil Nut Bay, Moskito Island and Little Dix Bay.
Since the beginning of 2018, a total of 122 acres has been sold in 216 transactions. As shown in the following chart, purchasers were predominantly Belongers. Belongers acquired 98.2 acres (80%) in 193 transactions. The remaining 23.9 acres (20%) was acquired in 23 transactions by Non-Belongers, with approximately half of that acreage located in Oil Nut Bay.
Outside the high value estates of Little Dix Bay, Oil Nut Bay and Moskito Island, there were 205 sales of residential lots in the BVI. The following chart tracks the average sale price per square foot and average size of lots on Tortola, which accounts for more than 90% of the transactions.
The chart shows that, since 2018, the average lot size has been around half an acre. The price of residential lots on Tortola has fluctuated between $3.70 and $4.90 per square foot (equivalent to between $80,000 and $105,000 for one half of an acre). Most residential lots are sold for less than $100,000, as shown in the following chart.
Sales of residential lots saw a significant increase in the first quarter of 2020, no doubt encouraged by the new Belongerships granted by Government at the end of 2019. And although the volume of sales slowed in the second quarter of 2020, this seems to have been a temporary setback, probably due to disruption caused by COVID-19. The market has bounced back in the third quarter of the year through 31 August 2020. Currently, the most active subdivision on Tortola is at Paraquita Bay, where the developer has sold 16 lots since 2018, and with 7 of those sales occurring in 2020. The most recent sale prices are between $92,000 and $113,000 per lot.
With the recent introduction of a stamp duty waiver for Belongers recently enacted into law by Government as part of an economic stimulus package and 100% loans being offered by National Bank of the Virgin Islands for land purchases by Belongers, it is likely that the market will remain active to the end of 2020 and into 2021. As purchasers begin to develop their properties with new homes, this will also provide a further boost to the construction industry and to the economy as a whole.