A booming business
Construction activities on Curaçao clearly indicate the real estate market is performing
well. A rapid growth in the number of real estate agents reconfi rms this assumption. In ten
years time, the real state market has fully recovered from a sudden drop in demand.
First homes – second homes - and offi ce buildings. Geert
Bijlstra confi rms that the real estate business is booming on
Curaçao. He is a real estate agent for Landmark Real Estate
and the spokesman for the Real Estate Association of
Curaçao (see column: Curaçaose Vastgoed Vereniging). The
current situation is a complete opposite of the situation of this
business ten years ago, according to the CVV.
In 1998 the real estate market wasn’t booming at all, due to a
couple of developments which occurred within a short period
of time. ‘To give you an idea, we go back to 1992’, says Bijlstra.
In that year, the government of Curaçao introduced the
so-called ‘Penshonado-regeling’, a scheme for retired Dutch
citizens with a desire and enough money to buy a house in a
warmer climate. The government offered them tax-advantages
if they moved to Curaçao, aiming to attract some expertise
from respected Captains of Industry at the same time. The
scheme was very popular and the demand from European
Dutchmen more or less dominated the real estate market for
half a decade, the CVV-spokesman says. But in 1996 the government
considered to adjust or even abolish this scheme.
During the same period, the economy of Curaçao performed
less than expected, jobs were cut in the public and private
sector and many educated people left to seek employment in
‘The consequence was that there was a lot of uncertainty in
the real estate market and a surplus of houses. Furthermore,
mortgages had high interests and people were not able pay of
their debt. Many houses were auctioned’.
The year 2001 was a turning point, according to the CVV, probably
due to a change in the mortgage market. A Dutch bank
offered mortgages with lower interest rates, percentages that
were common in Europe. Shortly thereafter, local banks also
cut their rates. As a new player in the market, the Royal Bank
of Trinidad and Tobago, which at the time had recently acquired
the retail banking activities of ABN AMRO, was probably
the fi rst. ‘Because of this, there was a whole new target
group: people who until then were not able to buy a house
because of the high mortgage rates, the local people’, Bijlstra
says. In 2005, another development turned out positive
for the real estate market. Due to the strong euro versus the
U.S. dollar and the Antillean guilder, Europeans could afford
a second home in the Caribbean.
European and local people still are the two main target groups
for the real estate business on Curaçao. Whether they want a
house for 60.000 euro’s or can afford one of 1.3 million guilders.
Even the ‘Pensionado-arrangement’ still exists, though
it has been adjusted to serve its purpose better.
However, developments need to be monitored, this being one
of the tasks of the Real Estate Association of Curaçao. For
example the fi nancial crisis. ‘It is impossible to predict if the
crisis will impact the real estate market and if so, to what
extent. If Europe turns into a recession or the euro becomes
weaker, this will impact tourism and ultimately also the real
estate market. Luxury goods are sold the fi rst. But in the long
term, real estate always keeps its value.’ The CVV-spokesman
adds: ‘We often sell real estate to people who traveled
the world and saw a lot of wonderful places. In the end they
come back to Curaçao. There is something about this island
that people love’.