“Beauty is in the eye of the beholder” – Greece 3rd century BC
We live in turbulent times and the recent recession in Barbados has hit pockets hard, across all sectors
of society. Many find themselves living beyond their means and have to find ways to tighten their belts.
Those who do not have their own family home, aspire to own one and many of those who do own one
have found it challenging to meet the payments and to maintain their homes to the standard they
would like.
Mortgages remain plentiful and are cheaper than at any time in my memory, so lot sales continue at a
significant pace and house building is still very active. The social revolution which took place over the
last 30 years enabled many to leave the family home and build their own starter home.
There are approximately 80,000 homes in Barbados and there are about 2,500 sales per annum, so
roughly 3 – 4% of the housing stock changes hands each year. But there are two dynamics that I see
taking place which could jeopardize that trend. The first is that the banks are more active in foreclosing
on mortgages which are not being serviced. The second is that there has been a decline in values,
notably of lots but also of houses since the recession took hold. The impacts are two fold, firstly there is
housing stock coming to market which may not easily be absorbed, and secondly buying a home is now
considerably cheaper than buying a lot and building new. Of course this contradicts the aspiration to
build a property specific to ones needs, but the strongest advice I can give at this time, as a valuer, is
that if you are thinking of building a home, strongly consider buying and fixing up an existing home. In
valuation we take account of the principal of substitution which holds that a rational buyer would not
pay more for a property than he/she would pay to construct a substitute of equal amenity and utility
Because of the challenging times many homeowners are forced to think about selling up in order to
balance the budget so how can you determine what your house is worth. Well consider these tips:
1. Neighborhood characteristics – these can create a premium or a discount to your property.
How close to amenities are you, ie schools, shopping, business districts, and is the commute
easy or challenging. Is there public transport nearby. Is the area improving or declining?
2. Does your property have any adverse or positive influence factors. Are there any
encroachments? Are there any nearby environmental impacts such as contamination or
pollution. Are there any nuisances such as noise.
3. Is your property better or worse maintained than the general housing in the area. If worse, are
there simple things which can be done to increase its market appeal
4. What is the demand and supply for housing in your area?. Are there many properties for sale
and if so how does your property compare.
5. Benchmark your idea of value – What price are lots in the area and how much would it cost to
build your house new. Then depreciate that cost based on age and condition
6. Key attributes – what are the key attributes to your property and do they add value. Examples
might be views from your property, tranquility, positioning within the street. So if you are at
Barbados Property News
By Terry Hanton
that the end of the street with interesting views and have neighbors on say two of your four
boundaries, you may find these attributes add to value
7. Is your property well landscaped? Well maintained gardens give an immediate impact to a
viewer.
8. Bathrooms and kitchens sell. It is an old adage but a true one so make sure they are well
decorated and maintained.
9. What other nearby properties have sold and what were the values like. How long did they take
to sell?
10. What is my competition - There are about 10,000 homes for sale in Barbados at any one
moment in time, many of them priced for negotiation, not for a quick sale. Many overpriced
properties have been on the market for many years
When you have finished this evaluation of your property you may have a better understanding what is
realistically achievable. Be a pessimist not an optimist if you want a quick sale. Remember “beauty is in
the eye of the beholder” so others may not see what you see