The dramatic property price drops in Spain, Portugal, the US and France have been well documented as the downturn has spread across the globe – but what of the Caribbean, the world's once most luxurious holiday home destination? Nigel Lewis reports.
When Roman Abramovich splashed out £54 million on a 70-acre Caribbean beachfront estate on St Barts late last year, it confirmed the über-wealthy status of this 7,000-island strong region of sun, sand, celebrities and the super-rich.
But despite its idyllic profile and the arrival of wealthy Russians, the Caribbean property market has been struggling as the recession bites. Prices are said to be down by 15 per cent across the region and by up to 20 per cent in the lesser-known islands.
Meet 'Mr Caribbean'
One man who's acutely aware of this is Walter Zephirin, one of the region's highest profile estate agents and developers. Son of an Irish mother and West Indian father, after a spell at school and university in the UK he moved back to the Caribbean seven years ago and now works with 40 agents and 70 developers – including Donald Trump – in the region via his company, 7th Heaven.
Middle market 'dead'
He says the middle market in the Caribbean is 'practically dead' at the moment and by that he means £400,000-£600,000 apartments or 'condos'.
"At one point a lot of British people were taking equity out of their UK homes and buying holiday homes in the Caribbean but the global recession has put an end to that," says Walter.
"Typical buyers are now stockbrokers, executives from the UK's FTSE 100 companies and company directors, and they are still buying here because they know there are bargains to be had," he says.
"And they are usually after medium-size beachside villas for around £2 million but they're hard to find at the moment so demand is outstripping supply."
Bargains to be had
Walter says that outside this narrow band of homes lower demand means it's a buyer's market: "You can approach a seller of a £1 million property and offer £800,000 and there's a good chance it will be accepted".
But the recession is biting in the Caribbean but not as hard as other holiday home markets. Walter says that the banks in the Caribbean were always more wary about risky lending than in Spain and Dubai, for example, and many countries in this island group also offer the tempting prospect of generous tax breaks too.
Citizen politics
"The islands have always been wary about letting in criminals and money launderers, so it's been difficult to persuade the islands' 32 different governments to enable more people to become citizens, but it is a strong reason for British people seeking 'non-dom' status in the UK to buy property here," says Walter.
St Kitts and Nevis is the best island if you want to buy your way into the Caribbean – if you spend £175,000 ($350,000) within one of the approved property developments on the island then citizenship is available for the owner and their family.
"Consequently, St Kitts and Nevis is a bit of a property hotspot at the moment despite the recession," says Walter.
"I have been trying to persuade the other islands to go down the same route."
Surviving the downturn
Other islands surviving the downturn with flying colours include the British Virgin Islands, whose sheer exclusivity and up-market reputation are keeping its small property market buoyant.
"The odd thing about this market is that, sometimes, the more difficult to get to an island is, and therefore the more exclusive, the better its property market is surviving the downturn," says Walter.
Flights of fancy
One other promising development is the increasing number of flights that British Airways is running to the region including, now, ten flights a week from Gatwick to Barbados and new flights to Grenada and St Kitts via Antigua.
"But remember that despite the problems created by the downturn, the Caribbean is still all about lifestyle for many – the people, food, unspoilt beaches, amazing views and weather – rather than just property prices," says Walter.