'Luxury Defined' Global Report

Second-Home “Lifestyle” Markets: Tropical Beach Resorts

A highlight of the newest trends and market developments in tropical beach resort markets fueling the next wave of homebuyers

Affluent buyers of second homes in tropical resort markets are increasingly focused on experiential luxury with atmospherics, luxurious lifestyle amenities, and one-of-a-kind experiences paramount. Though some tropical beach resort housing markets saw a steady stream of lifestyle-oriented buyers, overall luxury property sales in this second-home market saw a decline in sales as a result of prevailing global uncertainty in 2016.

Tropical beach resort markets that rely on significant capital inflows from cities impacted by uncertainty (such as Barbados with the UK) or political or economic upheaval (Punta del Este with Brazil and Venezuela) are seeing a pause in the market, offering significant value propositions for savvy buyers.

Locations that provide rest and relaxation amid a myriad of available amenities will continue to be a premium

New legislation targeted at foreign buyers and owners—both proposed laws and new laws already in place—have had a dampening impact on several tropical resort areas. In Fiji for example, a new law requiring foreign homeowners to build a $120,000-plus residence on any owned block of land by the end of 2016 caused some owners to sell at dramatically reduced prices, which had a flow-on effect on the remainder of the property market. As part of its annual 2017 report on the state of the luxury residential property market, Christie’s International Real Estate polled real estate executives and agents about trends in tropical beach resorts.

David Seerman of Provenance Properties, Cayman Islands, says that “The definition of luxury has changed in the Cayman Islands. Having high-end finishes, appliances and views is no longer special, it is expected. The new luxury is about what experiences and lifestyle the property grants them access to for themselves and their families. Vacation-home buyers are becoming less and less concerned with the actual real estate and are more amenity, lifestyle and experience focused.”

Bob F. Davey of Plantación Properties, Costa Rica, notes, “Inventory is at a shortage due to developer caution regarding a slow market for over eight years. The market started to recover in 2016 and 2017 shows good growth. Inventory and new construction starts are following this optimism. A few projects like Las Catalinas and the Four Seasons are leading the sales recovery in the luxury market. New luxury inventory is following the best five years of tourism in Costa Rica’s history. The international airports have record years, year after year, which shows the growing popularity of the Costa Rica market.” 

Cesar Herrera of Provaltur International, Dominican Republic, adds that “Many European, Canadian, and American buyers are actively looking at villas, condos, and vacant land, and want to make Dominican Republic their home, not just their vacation destination. Some of our clients see the DR like a hub in the Caribbean with direct, fast, and numerous connections from South America, Europe, and North America. Now with the results of U.S. elections behind us, we have noticed an acceleration of this trend, with showing requests for resort homes and land increasing dramatically. Buyers are not only looking, but also making wise offers to secure the best properties and to move some of their businesses here.”

Matthew G. Beall of Hawaii Life Real Estate, Hawaii, concludes, “Locations that provide rest and relaxation amid a myriad of available amenities will continue to be a premium. There’s a reason the people in Hawaii are among the happiest and healthiest in the world.” 

Kihei, Hawaii

[ Excerpt from Christie’s International Real Estate’s 2017 Luxury Defined white paper on the international prime property market. Read more insights from the latest report here ]