Turks and Caicos property market rebounds strongly
Last Updated: February 04, 2015
The 40-island archipelago is divided into two main island groups. The first group is the Turks Islands, comprised of the Grand Turk (the country’s historic capital), the Salt Cay and other adjacent cays. The other group includes the world-famous Providenciales (where 23,769 of the islands' total population of 31,500 live), South Caicos, East Caicos, Middle or Grand Caicos, North Caicos, West Caicos, and several other private islands like the Pine Cay, the Ambergris Cay and the Parrot Cay. A British overseas territory, the Turks and Caicos Islands are located off the West Indies, approximately 575 miles southeast of Miami and 30 miles south of the Bahamas.
Tourism is the bedrock of the economy. In fact, almost half of Turks and Caicos’ gross domestic product (GDP) is generated by the hotel and restaurant sector.
Partly for this reason, Turks and Caicos' economy suffered a decline in 2008 and 2009 when the global economic recession abruptly ended its high-end tourism and luxury property development boom.
At the same time a commission of inquiry set by the Foreign and Commonwealth Office found widespread “political amorality,” causing the Foreign Office to partially suspend Turks and Caicos’ constitution, dissolve the government and the House of Assembly, and impose direct rule in August 2009.
Home rule was restored in November 2012 and a new parliament was elected.
In the fourth quarter of 2014, average prices were up 17.1% compared to the fourth quarter of 2013, while the dollar value of total sales was up 20%.
Turks and Caicos – prices have moved down, especially for larger condos
Prices in Turks and Caicos have tended to move down over the past year, especially at the higher end. Prices of US$4,400 are typical for condominiums in Providenciales, so that a 120 square metre condominium would fetch around US$530,000
Somewhat higher prices per square metre are typical for larger condominiums. However, it is in this sector that the downward pressure has been most pronounced, with prices of large condominiums moving down to an average of US$5,500, from around US$7,400 a year ago.
Turks & Caicos has absolutely no taxes
There are no income taxes, property taxes, capital gains taxes, or inheritance taxes in the Turks and Caicos Islands for residents and nonresidents alike.
Buying costs are high in Turks & Caicos
Roundtrip transaction costs are around 10% to 22% of the property value, inclusive of the real estate agent’s commission at 6% to 10%.
Turks & Caicos law is pro-landlord
Rent: Rents and rent increases can be freely negotiated.
Tenancy Contract: Rental agreements in Turks and Caicos are either short-term contracts (up to a month) or long-term contracts (more than a month). For long-term rental agreements, tenants usually pay a security deposit equivalent to one month’s rent before occupancy.
Plans for future tourism growthTourism growth is largely concentrated in the island of Providenciales. Popularly called Provo, the island is famous for the beautiful 12-mile Grace Bay Beach. It caters to a total of over 360,000 stay-over visitors each year while the Grand Turk Cruise Center, the country’s first cruise port, has hosted more than 700,000 tourists every year since its opening in 2007.
The Turks and Caicos Islands Development Strategy 2013-2017 projects GDP to increase from US$625.9 million (US$549.6 million inflation-adjusted) in 2011 to US$939.5 million (US$636.6 million inflation-adjusted) in 2017. There's a new BBB+/Stable/A-2 Sovereign credit rating from Standard & Poor’s (S&P).
Stop over non-resident visitors are projected to grow from 354,000 in 2011 to over 413,000 by 2017, leading to government revenues expanding from US$193 million in 2011 to almost US$278 million by 2017.
The country has been reaching out to the South American travel market – particularly Brazil – while exploring opportunities to attract Asian luxury travelers. The country recently received "Approved Destination Status" from the Chinese government.