The St Barth property market remains serene after hurricane Irma !
Sibarth Real Estate was amongst the first companies to reopen in Gustavia after the hurricane’s devastating blow. Christian Wattiau, managing partner of the firm, comments on the foreseeable effects of Irma on the property market.
Why was it so important for Sibarth Real Estate to reopen so promptly?
For many reasons, it was crucial to reopen as soon as possible. Our new contemporary space, launched in December 2016, was flooded and so, for our own sake, we had to clean it and to bring it back to life without any delay. The Rue de la République had to put this unusually sad look of closed businesses behind broken shutters in the past as quickly as possible. Our clients, and the whole public in general, had to reconnect with the personal contacts and the communication media available within our offices. Additionally, we also had to do our share for jump-starting the island’s economic engine! Our close knitted team of 10 professionals, with their strong attachment to the island, worked tirelessly to reopen to the public on September 21. A feat in itself, which bolstered the team spirit and its human values, and which was more motivated by a sense of mission and assistance than by the goal of negotiating new transactions at this point.
What is your view on the hurricanes of this year?
We are facing a new type of challenge. Hurricanes are not new in St Barth, but this year their destructive power, their frequency and their reactivity are unheard of. Generally, the people of St Barth are well aware of hurricanes and well prepared for them, which is reflected in the island’s traditional architecture. But following a general trend over the last few years, these days villas are much more spacious, with panoramic glass windows that allow the superb island views. In the future, unless hurricane protection techniques are further improved, it might be necessary to reflect on a proper design compromise.
With the legitimacy of 40 years of experience in local real estate, how do you see the market react after Irma?
The first comparison that comes to mind, dates from 1995, after Luis, another devastating hurricane. Fewer houses were affected then, I admit, but it was a huge blow to the island infrastructures, to the beaches and to nature as a whole. The owners, properly insured, at that time focused on the rebuilding of their property and the complete offering of rental villas was back on the market by the Holiday Season, with the exception of beachfront properties. At the time, over the course of 3 to 4 months, we did not formalize any new listing agreement nor any price adjustment for the existing listings. This year, the behavior of owners seems fairly similar, the market remains serene, and I predict it will remain so. In St Barth, this serenity allows property values to be maintained, and thus for real estate investments to be secure in the long term. But it is true that in the short term, the activity level has dropped, resulting in a lack of liquidity for this type of asset.
Wouldn’t you think that such a traumatic event could have this time a more serious impact?
One must remember that hurricanes are not the only threats to the property market. Historically, many events have seriously disturbed it, such as the international economic recession in 1991-92, the September 2001 terrorist attack in New York, the global financial crisis in 2008… It is worth pointing out by the way that these threats generally have their origins outside of the island, not of its doing and out of its control. Each time, the market slows down – which in itself is sometimes desirable – then picks up again slowly before accelerating. However, it is true that this time the severity of this last event generates a socially frail situation for many island residents, some having lost their work if not their roof, and whose living situation is now challenging.
To conclude, you seem nevertheless optimistic for the future?
Absolutely, especially since other non-financial factors have added even more to the attractiveness of St Barth after such an ordeal. The efficient crisis management by the Collectivity, the solidarity of the island inhabitants no matter which community they belong to, the dynamic energy of all for its restoration, the support of foreign owners and visitors … are so many assets making our local society and its lifestyle even more attractive for many. What an exceptional collective force demonstrated by St Barth!
Picture Girl Paddle by Sébastien MARTINON