Why now is the BEST time to invest in land & real estate.

With a 16% fall in the FTSE in just one month, Dow Jones having had the worst May since 1940 and savings, bonds etc. unlikely to net you more than 5% at best; investors are all looking for safe havens right now. Putting aside the tremendous lifestyle benefits of Conch Developments freehold land products and the fabulous aesthetics of the Turks & Caicos Islands – buying land now with Conch Developments (or indeed any other quality vendor) as an outright investment vehicle is the perfect choice for many reasons: 

Providenciales

Land - it's safe, it's tangible and it always appreciates

Stability & Growth

The speculative purchase and resale of land has always provided stability and a proven track record of growth.  In today’s economy, there is clearly an appetite to leverage both.

Back to Basics Investing

Nosedives in stocks, currency and mutual funds have been commonplace in recent years and the current run on precious metals like gold and other ‘back to basics’ investments just goes to prove that savvy investors are all looking for safe havens to place and flex their capital.  Think about the safe haven you are probably sitting in now and its current value.  Ask yourself what was its value a decade ago, two decades ago?  What did your parents pay for their home and what’s its value today? 

A Buyers Market

Whilst stocks, currency and mutual funds are inherently unstable / risky (and more sophisticated securitisations such as derivatives are riskier still) – the long term rise in the value of land and real estate is clearly here to stay.  Year on year decreases in real estate prices are rare and short lived (with decreases in land values even rarer).  The current stabilisation in real estate prices has resulted in a buyer’s market and even the hard hit North American market has seen solid growth in real estate sales during Q1 2010 with double digit growth experienced in many key urban areas. 

A Tangible Investment

For those with the capital on hand, real estate – and especially land – is always the perfect investment because it is safe, it is tangible and over time it usually always appreciates.  The only negative with land and real estate is that unlike stocks – you cannot simply call your broker and liquidise your investment in a matter of minutes.  Therefore, there is always a need for investors to be realistic about the timeframes in getting their capital – and their profits – out of their investment.  Leveraged debt has led to many of the problems in the real estate market – just look at Dubai – so in today’s climate where low debt to equity ratios are pivotal:- investors must ensure that they have the spare capital to speculate. Gone are the days of the average man on the street speculating using leveraged debt.  For those who do have available capital and / or a low debt to equity ratio and thus an ability to be agile in today’s market then there really isn’t a cleaner and more risk mitigated investment than buying land – as long as it ticks certain boxes such as the land is freehold, absolute and clear title is guaranteed, planning permission is in place and the land is located in a sought after area with good infrastructure and socio-political stability.

Grace Bay - Voted World's Best Beach

A Convergance of Critical Factors

The rebounding economy is now creating the ideal opportunity for those wishing to get into the land and real estate market today.  How many people felt like they had missed the boat last time round while others reaped rewards?  Those same people are now incredibly lucky to have the convergence of factors required to take advantage of the real estate market moving forward so now is the ideal time to buy. 

Low interest rates and low rates of inflation in most areas are already stimulating purchases.  Invariably, rates will soon rise which in turn pressures buyers to purchase sooner rather than later and this underpins a secondary surge in sales.  We all know that demand consistently outstrips supply in most developed and mature areas.  This buyer’s market will rapidly transform into a seller’s market.  Furthermore, for those buying land, it is the ideal time to build on your land ready for resale or rental because not only is the market accelerating (or at least poised to accelerate) but other less obvious factors are all starting to play their part.  For example, the turbulence in the manufacturing sector has dramatically lowered the cost of construction materials.  The forced competitiveness of the construction market during the downturn has led to an army of highly skilled tradesmen who are all prepared to offer their services at advantageous prices.  The last real estate boom resulted in a surplus of real estate agents who have all been scrambling to find buyers and sellers and in doing so have reduced their commissions and upped their incentives. 

A Perfect Storm

So, there is a perfect storm of low but soon to increase interest rates, low inflation, low construction material costs, high availability of skilled tradesmen and real estate agents and this all has to be combined with the proven stability and growth of the real estate market over extended periods of time – virtually since time began.

A Simple Fundamental

All of the above goes back to perhaps the most fundamental rule of all when it comes to investing.  Buy low and sell high.  Moving forward, there will not be a time to buy low again for (hopefully) a very long period of time so don’t miss the boat.

The Turks & Caicos Islands

All of the previous applies in most areas of the world.  In terms of  land in the Turks & Caicos Islands from Conch Developments, there are a number of additional factors to consider, all of which underscore the fact that now really is the best time to purchase from Conch on the interest free terms that are available to all our clients:

The Caribbean & The TCI Poised to Explode

The recent Caribbean Hotel & Resort Investment Summit estimated that the number of tourists visiting the Caribbean over the next 10 years will double and the key to this is airlift and safety. With virtually no crime in the TCI and a British backed, democratic government – safety is already assured in the Turks & Caicos.

The Caribbean's Longest Private Runway

Providenciales Airport is currently being expanded to accommodate new routes from the likes of Virgin (word round the campfire is that they wish to connect to Provo directly from Manchester).  Airlines follow demand, they do not create it. 

Grand Turk has a sleek new international airport already attracting new routes and the TCI also now has the longest private runway in the Caribbean. 

With 7 airports and direct connections from London, New York, Philadelphia, Miami and many other US and Caribbean hubs; the TCI is already exceptionally well positioned in terms of airlift and it is seen as an easy place to get to.

$5bn of Inward Investment

It’s worth pointing out also that 2 new hospitals opened in April 2010 on Provo and Grand Turk and overall, there has been $5billion of inward investment in the islands over the last 5 years (not bad for a nation of just 36,000 permanent residents).

Double Digit Tourist Growth

The TCI enjoy (and have enjoyed for a very long time) annual double digit tourist growth and thanks to the foresight of the government in supporting a $40m investment in a cruise centre a few years ago; the TCI is now beginning to dominate cruise traffic in the region.

Westerdam Docked @ $40m Cruise Centre in Grand Turk

The TCI enjoyed a 25% increase in visitors to Grand Turk alone from cruise ships in 2009 with over 500k visitors arriving – a figure expected to almost double in 2010.  Partially due to the explosion in visitors to Grand Turk; demand for accommodation and luxury housing is dramatically outstripping supply. The TCI have an incredible repeat visitor ratio of over 60%, a figure that continues to grow thanks to a superfluity of high net worth family tourism products.

Stablilised, Steady & Rising Demand

There is already steady and rising demand for new homes and room inventory in all the islands and in some locations – such as Grand Turk, Provo and North Caicos – the demand is substantial.  Occupancy has been up to 95% during high season and annual rental returns are around the 10% mark.

Despite the sluggish economy in many locations around the world; villa vacations were a hot trend for 2009 and promise to continue in 2010 according to Luxury Retreats (one of the world’s leading specialists in luxury villas).  This is positive news for the Turks and Caicos Islands and Luxury Retreats says popularity has increased there by 14% over the last 12 months.  Their income is also up 50%.

Outperforming Regional Peers

The TCI has the both the highest living standards and the fastest growing economy in the entire Caribbean.  It has extremely high GDP and an overall economy that is incredibly stable and diversified.  

There is no direct taxation and in addition to the most flexible and progressive residency laws in the region – they have had in place an open arms investment policy for a considerable period of time – something other comparable countries in the Caribbean are only just waking up to.  This policy continues to attract business, investment and residency in the islands.

The TCI - An Open Arms Invesment Policy

To ensure their economy continues to flourish in the area of land development – the government in March 2010 significantly reduced taxes on land holding companies when they issue new shares to raise capital for development and expansion.  They have removed significant administrative, tax and other obstacles to new and existing proposals for resort, housing, renewable energy and other developments which is bringing new investment and new jobs to the TCI in the area of real estate development.  The government has dropped the tax from 8% to 0.2% on new equity issues in parent land holding corporations so these duty savings can be passed on directly to consumers.  They have similar innovative policies for other areas of their economy.

Listening to the Experts

According to ReMax in the Turks & Caicos:

It is very evident that we are seeing more real estate traffic.  This is an encouraging sign and buyers have recognized that property prices have actually stabilized.  While it is true that the real estate market adjusted itself accordingly in response to the global economic downturn, we had seen a tenfold increase in real estate values in the years prior to that so the market was always going to find its level.  We actually saw undervalued assets in many cases.  Having definitely seen an upswing in the market so far in 2010, this has to be favourably balanced against a whole raft of value adding indicators to the islands that will continue to bear fruit such as the airport expansion on Provo, two new hospitals, numerous new resort and condo developments, new real estate entrants, impressive tourist figures and the ongoing gentrification of the prestige areas (dovetailed with an overall scarcity factor in many locations). On the condominium front, we see a steady absorption of current stock [ED: with a condo sold last month at a record breaking price of $856 per square foot]. Raw land sales are very much back on the front burner and savvy investors never stopped purchasing raw land as a savings initiative anyway.  Given the above – and with prudence in mind – we would generally assume a figure of 20% growth over the next two years from 2011.  It’s never guaranteed of course but the unstoppable force that is destination TCI simply has too much to offer visitors, residents and investors alike in terms of natural beauty, sophisticated infrastructure, personal security, family tourism products and socio-political stability

Key Points to Note on Conch Developments Land Products

Some key points to note on our land products:

  •  All of our land is sold at below market value allowing clients to benefit from equity at the offset.
  • We cannot stress how advantageous it is to buyers for them to be able to buy our land on interest free credit because for those simply interested in buying and selling their land over the next year or two – they are able to flex the full (and escalating) value of the land they have bought without having to pay anywhere near the full amount of their original purchase price.  An example of the potential returns from leveraging your capital like can be up to 87%.
  • All our land is freehold with absolute title guaranteed by the British Crown
  • There are no restrictions on foreign ownership and there is no direct taxation whatsoever in the TCI (including no tax on sales or rental income and no capital gains tax).
  • All our land comes with planning permission in place for a residential home
  • Conch Developments provides all the key infrastructure including roads, electricity, walls, gates, communal green areas and in most cases piped water, broadband and street lighting. 
  • If not already done so (and roads, gates, walls, street lighting, electricity supply, piped water and cable broadband / TV are all completed on our Blue Water Villas development and almost completed on our Columbus Vistas Development); we contractually commit to commence the building of the roads and infrastructure on the development within 12 months of the first plot being sold. 
  • All of our developments are located in the most prestigious and well connected parts of the islands close to all luxury amenities, services and sophisticated infrastructure.
  • We offer turnkey building solutions on all of our plots at highly competitive prices and this can also be done on staged payments.  Furthermore, we also facilitate residency / domicile solutions for those who desire them.
  • All deposit payments from clients are held in secure client accounts until contracts have been exchanged. 
  • Once 75% of plots are sold on a development, we are happy to sign over all communal areas to any residents association that is set-up by the plot owners (and a residents association has already been created by clients on Blue Water Villas)

What Are You Waiting For?

Our Serendipity Beachfront Development on North Caicos

So, given the fact that now is the best time to buy land and that Conch Developments has arguably the best beach and marina land available on the planet – all sold at below market value and on friendly payment terms – what are you waiting for? 

Contact us today for your free client prospectus which includes our latest plot brochures.  Mention you saw our blog and we will be happy to give you some added value on your potential purchase.

For more information on Conch Developments and the Turks & Caicos Islands, please visit our website at www.conchdevelopments.com and watch our video at www.conchdevelopments.com/consumer-video.php

Email us now at info@conchdevelopments.com

 
 
 
 
 
 

West Caicos

Conch Developments and The Turks & Cacos Islands – Paradise Found.

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~ by Conch Developments on April 24, 2010.

One Response to “Why now is the BEST time to invest in land & real estate.”

  1. Makes perfect sense, can you send me a prospectus on your land products please as I am interested in investing. Thanks.

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