The Turks and Caicos Islands Offer a Unique Opportunity in the Global Real Estate Market, But Here’s Why You Should Buy Now.
In our March post to Insights, we unpacked the complex short-term rental market in the Turks and Caicos Islands. We discussed the opportunity to achieve significant ROI on custom villa properties due to the exceptional occupancy averages and per-night rates. But arguably, that's the cart. How about the horse? Before you have your villa, you need the land.
An Overview
The real estate market in the Turks and Caicos Islands is still in its relative infancy despite posting eye-watering per-acre prices. The first significant development, Grace Bay Beach, did not open until 1984. Since then, the market has been growing as more buyers discover the islands as a uniquely desirable place to invest in property.
Grace Bay Beach from Bight Reef
One of the key factors contributing to the current state of the market is the Turks and Caicos Islands' long-term stability. In an era of political and economic turmoil, the islands offer a unique opportunity for investors looking for a safe haven to park their money. In addition, with no income tax, estate tax, or capital gains tax, the Turks and Caicos Islands are an attractive option for those looking to invest in global real estate.
What's more, the islands offer a relaxed lifestyle that is appealing to many people looking to escape the hustle and bustle of city life. The climate is perfect for those who enjoy spending time outdoors, and there are plenty of activities to keep people of all ages entertained.
How much does land cost in the Turks and Caicos Islands?
In a nutshell? Quite a bit. The prices for land in the Turks and Caicos Islands vary depending on the location and the size of the property. But, in general, prices on the lesser-developed Islands are still quite reasonable compared to other luxury island destinations in the world (also Providenciales).
Map image courtesy of visittci.com
For example, a 0.6-acre lot on South Caicos Island can be purchased for around $200,000. A 1-acre lot on Grand Turk Island is priced at around $100,000. Providenciales, however, is vastly different. Provo has experienced a whiplash-inducing increase in the asking prices for land and turnkey completed villas. As of the writing of this article, 2.27 waterfront acres in Blue Mountain, a beautiful area close to the charming and desirable Turtle Cove, is on offer for USD $7.995 million (roughly $3.5 million per acre) North Caicos beachfront is roughly 1/10 the price, with 22.83 acres of beachfront property on offer for USD $7.7 million (approximately $337,000 per acre)
Mother's House, an iconic Providenciales villa was built by SKAPE Design+Build (as RA Shaw Fine Architecture) in 2012. In 2015, it was available for approximately USD $4,000,000. 7 years later, it is currently on offer for USD $14,500.000.
The beautiful “Mother’s House” in Providenciales
While these prices may seem high (and they are), it's important to remember that they are still less than what you would pay for a similar property in other comparably high-end destinations such as Seychelles, The Maldives, BVI, etc.
What does the TCI real estate market look like now?
The real estate market in the Turks and Caicos Islands has been growing steadily in recent years. In 2018, there was $477 million worth of real estate sales registered on the islands. This figure is up from $390 million in 2017 and $360 million in 2016. According to Sotheby's International Realty, The TCI real estate market in 2021 experienced a stupendous year where annual sales volume increased to $751 million. Single Family properties accounted for $369 million, up 137% over 2020's $155 million, with average prices up 30%, from $1.72 million to $2.25 million. Condominium sales, led by the completion of The Ritz-Carlton, improved by 282%, from $59 million to $225 million, with a 33.5% increase in average price from $1.03 million to $1.38 million.
The Ritz Carlton at Grace Bay Beach. Image courtesy of Ritz Carlton Group
From our friends at Sotheby's International Realty, this is the state of Q1 real estate in 2022.
“Turks & Caicos Real Estate continues to soar as 2022 is shaping up to be another strong year with buyer demand remaining solid in a fast-paced market with a lot of moving targets. Competition for desired properties is high with many listing agents managing multiple offers and off market properties selling without coming to market. Buyers know what they want, and sales agents are digging deep to find an appropriate investment or vacation home for their clients and customers.
Construction throughout Providenciales, even without large scale vertical development, at this time, is at an all-time high with new homes coming out of the ground in all community areas and stretching to the out islands. The biggest issue for builders and developers is trying to contain ever increasing construction costs hit hard by supply chain and inflationary issues.”
View the TCI Q1 Report from Sotheby's International Realty
The majority of high-profile properties sold on the islands are unsurprisingly waterfront lots or turnkey waterfront villas. However, remember the Islands are small. Providenciales, the most developed of all the 8 major Islands in the archipelago, has experienced whiplash-inducing increases in the price of land of late, and the entire island is only 37 square miles (98 square km). To put this into perspective, Houston, TX is 600 square miles (965 square km).
Here, maybe more than anywhere else, the classic driving force behind real estate investment rings true - "they're not making any more of it". Waterfront properties in Provo continue to list at ever-increasing prices.
What does the future hold for the real estate market in the Turks and Caicos Islands?
The future of the real estate market in the Turks and Caicos Islands looks bright. The islands are a desirable destination for both vacationers and those looking to invest in global real estate. With their long-term stability, low taxes, and relaxed lifestyle, the Turks and Caicos Islands will continue to offer a unique opportunity in the global market.
The Bahamas, a more established Caribbean real estate market, has posted similar significant increases in values. As a result, the Bahamian real estate market is booming, and prices for beachfront property are increasing rapidly.
In 2017, the average price for a beachfront property in the Bahamas was $1,451,000. By 2018, that average had increased to $1,611,000. The average price for a beachfront property in the Bahamas reached $2,000,000 in 2020. With new resorts and hotels opening up throughout the country, the demand for beachfront property will only further increase.
We can expect the Turks and Caicos to have a similar vector. Increasing values in Providenciales will necessitate further infrastructure development on the other islands, where this cycle will repeat. But, until then, if you're looking to invest in a custom-built villa in Providenciales, you will want to secure the land sooner rather than later.
SKAPE Design+Build, formerly RA Shaw Fine Architecture, is the pre-eminent builder of iconic villas in the Turks & Caicos Islands. We will be continuing our series of articles on the logistics, challenges, and opportunities surrounding investing in the Turks & Caicos Islands via new construction villas. Visit us at www.skapetci.com
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