fp Turks and Caicos

Joe Zahm, a pioneer in the real estate development and sales industry, who has had involvement in a majority of the developments on the island of Providenciales in one way or another, gave the “fp” a perspective on the current real estate market in the TCI. Zahm says we are seeing some effects here in the Turks and Caicos, but nowhere near what the world as a whole has seen so far.

Due to the contracting cash flow in the Unites States, the Turks and Caicos is sitting at a metaphorical standstill in regards to value appreciation as well as buying and selling real estate. However, when comparing with the impacts some other places like Miami and New York are feeling, a flat market is not such a bad position to be in right now.

According to Joe Zahm, we have been spared a many of the pains being felt elsewhere due to the strong equity position of most owners here in the TCI. “The equity to debt ratio in the Turks and Caicos is very high compared with other places. Here we often see around 80% equity to 20% debt, where in the US for example you are seeing people with 20% equity foreclosing when they cannot keep up with the 80% debt,” explained Zahm. “Owners here are not being forced to get out from under their overwhelming debt, which is why prices have stayed relatively stable.”

When one considers the scale of the global financial crisis, it is almost amazing that prices in the Turks and Caicos real estate market have actually remained stable. Zahm says “In 2009 we are experiencing a bottom of the market in terms of real estate volume. There are not many buyers out there and sellers are staying strong.” Zahm predicts that over time some sellers may become more desperate and a few pieces of less unique properties may fall some more. Depending on the extent of the world economic crisis moving forward, prices should be on the verge of recovery.

At the same time, the TCI is also experiencing a great deal of political uncertainty. According to Zahm, the real estate market and slow down in the economy was inevitable given the world financial crisis. “The political situation does not help us here, but the market development would have taken place either way,” Zahm said of the impact the political turmoil is having on sales and potential investors in the market.

Zahm has experienced many highs and lows in the industry over his twenty years in the Turks and Caicos. He says although we may be experiencing a global down time, he fully expects the country to come back stronger than ever. “Every time we have experienced an extreme low, it has been followed by a steep high,” Zahm described. Echoing the thoughts of many, Zahm says that although the markets may fluctuate, the things that attract people to the TCI in the past have not changed and will continue to attract them in the future.

“We will see an increase in tourism after this dip is over,” Zahm predicts, “we will come out of this a stronger real estate industry, backed by developers committed to the long term.” Zahm names its proximity to the U.S., the increasing availability of air service, the immensely improved infrastructure and the imminent arrival of the new hospitals as the major contributing factors to the past and potential future success of tourism in the country.

“With proper government to lead us, we can go to terrific places in the future,” Zahm additionally went on to explain that all this is setting up for a healthier posture in 2010.