Why so many Barbados condo projects? The answer will shock some investors.

“Everyone makes money with the exception of the developer investor.”

Condos here, condos there. Half finished, never finished condos everywhere!

New foreign investor arrives in Barbados!

by “Number 37”

The reason why condos continue to be built in Barbados has nothing whatsoever to do with the ability to sell them.

They are built because someone, largely overseas developer investors, will invest in their construction.

The real estate agents give inflated projections on sales at inflated prices, the local contractors and design consultants reinforce these mistaken projections – the developer investors see profit. The development gets built, everyone makes money with the exception of the developer investor. Some projects never even get to completion.

The problem is the caliber of developer – most are ego investors – business men made good in some other business, who listen to the siren call of the “Barbados Building Machine”. Once the beast is fed and the financial life blood drained from the investor they are discarded until the next fool steps of an airplane.

One way to stop this nonsense would be to require fully audited development business plans to be a condition of the granting of planning permission – then 25% open market sales before the construction can commence. That would identify and kill-off the unsustainable schemes.

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15 Comments

Filed under Barbados, Business & Banking, Offshore Investments, Real Estate

15 responses to “Why so many Barbados condo projects? The answer will shock some investors.

  1. watcher

    One development Jasmine Gardens has just celebrated its 5th year of non completion. The developer builder is Rupert Spencer who is also building Welches. It is not only foreign investors but local businesmen like Mr. Spencer who bite off more than they can chew.

    The bad news of investing in Barbados real estate is traveling fast and hurting the economy. People like Spencer don’t seem to realize that uncompleted projects where units are sold to foreigners has a major negative impact on the countries foreign exchange reserves.

    Sad state of affairs for many.

  2. Adrian Loveridge

    And look how much of prime oceanfront land has been taken out of better finanancial and employment use just to be idle behind plywood and plastic.

  3. peltdownman

    Adrian, when it happened, I predicted that the 1/2 km of hoarding at Sunset Crest would be there for 5 years. Looks like I was wrong – it will be there much longer.

  4. Dan

    Rupert Spencer is running what essentially amounts to a pyramid scheme. He takes monies from one development to fund the next. It’s catching up with him, as there are several law suits pending. But meanwhile, many investors are out hundreds of thousands of dollars.

    One wonders — how exactly is he able to continue obtaining financing for new projects? Well, that goes to the heart of this article doesn’t it?

  5. 110

    @Dan

    Spencer has more company names than Yellow Cab have Taxis. The real winners are the persons he co-develops the land with. The losers are the persons buying houses. Town and Country are the persons who keep granting this fellow permission to build things. Who onwed the land at Welche, Bakers Field and Jasmine Gardens. It would be interesting to check that out. You might find some prominent Barbados business men are his partners. They should all be painted with the same brush. They are doing the country real harm and destroying the real estate market.

  6. Adrian Loveridge

    peltdownman,

    We have an abandoned 50 unit condominium (Sandcastle) site just about half-a-mile away and a similar distance a closed 130 room hotel.
    I also think its time to see exactly what percentage of these ‘investments’ actually stay on island and are not hidden in the Caymans, BVI or other offshore domain.
    We really have to think about WHERE we are going in tourism.

  7. Buddy Braithwaite

    @ Adrian Loveridge

    Don’t be jealous because you have a run down, two bit hotel.

  8. 222

    Mr. Peter Harris (CGI) was one of the more successful condo developers in Barbados when Owen was “bout here”, however, when the market crashed he was left holding many of the units in Sandy Lane Falls and a derelict Coach House property that RBC debt financed. The last extension of the interest only phase of the loan recently ran out and Harris/ Bailey are complaining that they are not in a position to service RBC’s full mortgage. The consequence of the overly aggressive approach by Harris, Bailey and Spencer is not only impacting on our reputation as a country but can undermine the local financial sector as a result of defaulted loans – resulting in loss of jobs, increased interest rates, etc.

  9. Observer

    Ask Peter Harris and Bruce Bailey how to run the “perfect” condo ponzie scheme. Sandy Lane Falls and Coach House are prime examples. RBC and Harris/ Bailey are at war over the derelict Coach House project. The only person who came out smelling like a rose was Howard Palmer. Harris/ Romel Marshall have been left holding a number of units in the Sandy Lane Falls project.

  10. Buddy Braithwaite

    @ Anonymous

    You must be a real knucklehead to say, “undermine the local financial sector as a result of defaulted loans”

    Have you paid any attention to the published annual financial results of the most foreign bank in Barbados? Its the financial institutions that have sat on the back of hard working Bajans for years milking them like captive animals with high interest rates, unfair terms and poor service.

  11. I saw on Facebook that Barbados as a signatory to the WTO in 1994 means we cannot have an Alien Landholders Act – is this true? Who can verify this?

  12. 298,766

    Poor Barbados -a house of cards
    about to collapse?

  13. 72

    Do you tell us if in these Develope areas when we purchase land does that includes 0nly the land and verge or does it also includes the road ? I WAS interesting in purchasing a lot @ crusher site Road which is next to the U W I ,i valuer did not include the road which he said was illegal but the real estate agent kept saying that he was wrong ,i have check with other agents who assure me that my valuer was right ,i know that the Banks will not accept the real estate valurer . PLESAE help other purchasers as my parents who were biging this land has pull out ,but others who cannot afford seems to be being rip off

  14. yatinkiteasy

    There is a report out there on Barbados Today that Immigration is only giving Foreigners 3 months stay in Barbados, versus the max 6 months they used to, even if the person owns a villa or condo. Is this true?

  15. Mr Watson Parkinson

    It’s high time Barbados Developers stop this nonsense of building unwanted homes. I live in a gated community with 12 units, only 5 units are occupied the other 7 are left without due care.
    The question is, why are developers still given permission to build…? How are the developers gaining financed…?
    This practice is hurting the economy of the country, Government should scrutinized applicants.