Evolution of the Tourist Season (November-August 2023)
The recent evolution of the real estate market in Saint Barthélemy, following the events of Hurricane IRMA (2017) and the COVID-19 pandemic, has seen significant ups and downs. The period marked by high demand and a shortage of properties for sale, which had led to price increases, now seems to be stabilizing.
Since December 15, 2022, the market has regained a certain balance, and the sharp price increases appear to be a thing of the past. It’s observed that the time it takes to sell properties is extending, indicating a downward price trend. This trend is more pronounced in the segment of properties priced above 10 million euros, where the time to sell has increased from 12 months to 24 months, with negotiations resulting in price reductions of 12% to 20%.
We see a similar trend in the segment of 5 to 10 million euros; however, the segment of 2.5 to 5 million euros is less affected, with a stable realization period of around 4 months. In the segment below 2,500,000 euros, there is fierce competition due to the influx of properties for sale. Here, the time to sell, which was 4.5 months, has increased to 11 months in 2022.
Adjusting prices based on the market situation is crucial.
As for the future evolution of the real estate market in Saint Barthélemy, it’s important to note that the collectivité has increased the capital gains tax rate from 20% to 35% for the first eight years of ownership since May 2017, in an effort to curb real estate speculation. This measure has had an impact on the sale of new houses, which now represent only 20% of transactions, as many property owners have opted for “location saisonnière with services”.
However, the stock of new houses will mature at 8 years in 2025, which should make them available on the market starting from 2024. This influx of houses into the market will likely affect the sector of houses with two or three bedrooms and sea views.
The suspension of building permits issuance demonstrates the community’s desire in Saint Barthélemy to slow down economic growth in order to preserve the quality of life and focus on housing for residents. This policy could have two important consequences: the release of rental and sale properties through renovation, as well as an improvement in housing conditions.
Although Saint Barthélemy may experience a period of slowdown in 2023-2024 due to excessive price increases and tensions in the rental market, long-term steady growth of about 10% per year is expected. This island has become a high-end brand, and real estate prices are closely tied to the scarcity of properties available for sale.