The Real Estate Market in Grenada Stinks!


Since it is essential to have activity to “make a market”, the Real Estate Market in Grenada is virtually non-existent! It has been this way for several years and, in my view, there is no prospect of improvement in sight. Contrary to popular belief, the reason this is so is not primarily because of “world economic conditions”. It is principally because there is a virtual nil supply of “aliens” to Grenada.

Of course when economic conditions deteriorate abroad (as it has), the potential supply of prospective “aliens” diminishes, but it does not ever go to zero. There are still prospective aliens with economic means with a desire to acquire their “place in the sun”, but competition to attract them has become even more intense.

How does Grenada compete on economic considerations? Very, very poorly! According to the website Global Property Guide, which looked at the combined cost of a non-national to both buy and sell property, Grenada ranks indisputably last of a list of 25 locations in the region:


Screen Shot 2014-03-23 at 3.37.18 pm


The above cost includes Government Non-National Taxes, VAT (on Legal and Realty Fees), Legal Fees & Stamp Taxes on Buying and these same plus Realtor Fees on Selling.

The writer did some independent research to verify the cost attributed to Grenada, and concluded that the 42.6% may be somewhat overstated as I found it to be 36.85%. The 36.8% is comprised as follows:

Buying: 13.8% (10% Transfer Tax + 2.3% Legal Fees (incl. VAT) + 1% Stamp Tax + 0.5% Survey Fee.)

Selling: 23.05% (15% Transfer Fee + 2.3% Legal (incl. VAT) & 5.75% Real Estate Fees (incl. VAT))

The 36.85% total, however, is the simple addition of the buying and selling cost and is understated. The total cost is actually 40% because the percentage costs for selling is on a higher base — the original cost plus purchase costs. In sum, a non-national considering Grenada needs to realise a 40% appreciation in the original property value to recover all of the funds outlaid for the property.

Whatever way you cut it, Grenada, among all the countries in the region, offers non-nationals the greatest disincentive to invest! A non-national requires the greatest capital appreciation potential for them to recover their “investment”. For some perspective, compare the 40% round-trip cost in Grenada to the 12% for Barbados and you get some understanding why the property market in Barbados remains somewhat active even in the down cycles, while in Grenada it vanishes.

Economic considerations are a fundamental part of the majority of non-nationals’ decision to buy property. Yes, there are a (very) few non-nationals who have so much money that they can easily afford to satisfy every whim without any regard to cost. A non-national also recognises that their residency in paradise will only last for a few years — usually until they need to return to their home bases for medical or family reasons. This mandates that, before deciding to buy, they closely examine the opportunity to eventually sell the property — ideally with some capital gain, but at least a recovery of their investment. To achieve this, “reasonable” acquisition and disposition costs coupled with an active real estate market that provides good appreciation potential are required. Conditions in Grenada today are very negative on every one of these aspects.

A non-national purchasing a property for US$800.000 in Grenada needs to eventually sell for a minimum of $1,120,000 simply to break-even on their investment! This represents an increased value of US$320,000, which, over a five-year period, requires an average price appreciation of 6.75% every year, (or 4.25% over 8 years). Most importantly, they need an active market to enable a sale.

While I am on the subject of exorbitant fees, let’s consider the 2.3% Legal Fees component on buying and selling (which I suspect is also applied equally to Grenadians). In the above example, legal fees (including VAT) for the purchase would come out to US$18,400 and legal fees on selling at the “break-even” value would be US$25,760. Compare this with approx. $700–800 buying and $650–750 selling in Canada! (The Canadian fees reflect the fact that most real estate transactions are entirely routine and executed mostly by legal clerks.) Non-nationals must feel as if they are being fleeced by everyone — and they are.

(N.B. – I should add that the Grenadian Legal Community is not alone in charging what from my experience are exorbitant fees, as the legal fees seem to be similar in many of the Caribbean Islands.)

Non-nationals typically buy homes at the upper end of the market. When there are no non-nationals, the upper end of the market dies. Sales below this level also come to a standstill, as there is not the necessary ability of other property owners to buy up. This ultimately results in stagnation at the bottom end and new homeowners (Grenadians) have severely reduced opportunity to enter the market place.

With the punitive impact on non-national purchases, the mid and lower tiers of the market are also directly affected. I encounter parents of students at the University who consider buying accommodation suitable for their children for the required four or so years of residency in Grenada. Once they examine the economics, they quickly discard that notion.

Should the high price of market entry and exit for non-nationals continue, real estate market conditions in Grenada will change little if at all, even when world economic conditions eventually improve. I am aware of many non-nationals who have thoroughly enjoyed their time here but who now need to return to their origins. They cannot sell their properties for prices that would not involve their taking huge losses and instinctively refuse to reduce listing prices materially. They now feel trapped in Grenada and basically just sit and hope for the best. While I would like to be in a position to offer encouragement, my sense is that these properties, first listed two years and more ago and are still for sale, will most likely remain so next year and perhaps beyond.

It would be bad enough if the high costs only affected non-nationals, but the reality is that it is affecting all Grenadians as well. The high purchase and sale costs for non-nationals keeps house prices artificially high in ALL segments of the market.

If the objective of high government purchase and sales taxes on Aliens is to raise a lot of revenue, I suspect that even a casual examination of the record would indicate that this strategy is clearly not working. If on the other hand, it is based on ideology i.e. to limit the number of non-nationals to Grenada, a far better way would be to modify the Qualifications for an Alien License to exclude those whom Government deems to be “undesirable”. In addition to earning little revenue, a large number of people who would stimulate our real estate market and otherwise make meaningful contributions to our economy and Grenadian society at large, are led to not even consider Grenada seriously as a destination to purchase property and reside.

From the perspective of “undesirables”, I sincerely hope that the present laws will be reviewed and changed so that basically everyone without a criminal background and able to demonstrate that they have the resources to support themselves fully while in Grenada would become labelled as “highly desirable” and actively encouraged to come to reside in Grenada. Further, initiatives to foster this could rationally be integrated with tourist promotion under a general umbrella of “don’t only come to visit, stay”!

My suggestion to promote residency integral with tourism is not in the least preposterous. Fact is that “residents” actively attract visitors to the Island — friends, relatives and associates. If they feel “comfortable” residing in Grenada they will also actively promote property ownership in Grenada far and wide. With the current conditions, the opposite is likely happening now.

In addition to a drastic reduction (ideally removal) of the high Land Transfer Taxes and a change in labelling from “Alien” to something far less stigmatising such as “Resident”, Government needs to remove every one of the very many additional levies as well as the annoying periodic permits required of non-nationals and recognise that these are totally counterproductive.

Such a strategy could reduce and may ultimately eliminate the need for Grenada having to go around the World, cap in hand, begging for charity and selling our souls to countries like China (for suppression of Taiwan), Japan (the hunting of whales), and the like, in order to sustainably raise the funds necessary to continually improve our infrastructure.

In closing, I can just hear many readers shouting “Grenada for Grenadians. Keep the foreigners out!” Notwithstanding, I would wager that many (if not every one) of these are people are not among the majority of Grenadians who are struggling to make ends meet. Would it not be so much more productive to pursue “A better Grenada for all”?

Don Quixote


P.S. – The writer is a retired national who basically spends winters in Grenada and is not engaged in the Real Estate Market in any way. I am a property owner but not looking to sell in the foreseeable future. However, on further reflection, perhaps I should list now, as without significant reduction/removal in the Alien Land Transfer Taxes and the many, many other disincentives for non-nationals to come reside in Grenada, it will likely take me several years to sell.

Article Footer 468x60

Facebook Comments

2 thoughts on “The Real Estate Market in Grenada Stinks!

  1. Bern Lewis

    I could not have said it better… I am keeping my investment for similar reasons. The government take care of themselves. I am getting up in age and would like to sell everything and move on. The medical situation there stinks…

  2. Bern LewisKX

    I could not have said it better. The government is for themselves only… I would like to sell everything I own there and move on. The medical situation stinks. And as long as they can jump a plane to get their medical help things won’t change anytime soon…

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Posts