The housing market in the Dutch island of Aruba is bouncing back from the pandemic.
Aruba – Island Territory of the Netherlands
Aruba’s arid climate gives way to some of the most beautiful beaches in the world. Alabaster white sand and turquoise water surround this 69-mile island territory of the Netherlands. Importantly, Aruba is outside of the hurricane belt in the south Caribbean Sea.
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This island nation has a surprisingly diverse population of approximately 112,000 people who represent over 90 nationalities and ethnic groups. Many people are fluent in English, Dutch, Spanish and the local Creole language. European, East Indian, Chinese and Filipino communities celebrate their respective cultures and traditions throughout the year.
Aruba is just 18 miles off the coast of Venezuela. Volcanic rock gives way to secluded coves and encourages “gentle” rock climbing opportunities. The southern and western sections of this 19-mile island are home to beach wanderings, resorts complemented with world-class golf and gambling.
Market Overview
After the Great Recession which stagnated Aruba’s housing market, prices stabilized prior to the COVID pandemic. The mid-2019 median price for a home in Aruba was about $321,000, according to the Central Bank van Aruba. Then came the pandemic and sales and prices took off.
Edith Coupland, broker and owner of RES Realty Development and Decor, said that pre-pandemic, it was common for homes to sit for a year plus. After a few months of the pandemic, more homes sold in 2020 than any year prior. Coupland said that now, “Many properties are sold in a day.”
Prices
Edwin Hekman, broker and owner of Keller Williams Aruba, indicated that by January 2022, estimated year-over-year home prices will have increased +4%…estimated because Aruba doesn’t publish official price statistics. Hekman said that in the Noord area, the most popular part of the Island with foreign buyers, prices may have grown by more than +10% as supply has tightened.
Hekman said, “Especially for homes priced between $400,,000 and $500,000, three-bedroom with a pool, a lot of Americans and Canadians have bought them in the past year. In that price range, it’s a little difficult at the moment to get a decent house.”
Houses near the beach now sell for $500,000 to $750,000. Beachfront properties, few and far between, demand a premium and can go up to $6.5M.
As weather patterns shift and hurricanes become more common in other Caribbean luxury destinations, Aruba is becoming more popular and more pricey.
Who Are the Buyers?
North Americans dominate the pool of foreign home buyers though European buyers from Germany, France, Italy and Russia are now more common in that pool. Obviously, Dutch buyers are prevalent as Aruba is one of three Caribbean islands (Saint Martin and Curacao being the other two) belonging to the Kingdom of the Netherlands.
Approximately 90% of privately-owned homes in Aruba sit on land leased from the government. Leases last 60 years with an annual leasing rate of $1/square meter or $0.09/square foot. Leases are typically renewed upon expiration.
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There are no restrictions on foreign home buyers. Most have been paying cash however, mortgages are available to foreign buyers with 40% down and an interest rate between 6.5-7%.
Thanks to The New York Times.
