Although many in Antigua may not have been aware of the UK General Election which occurred December 13th in there may be a good reason to take note of the result which could provide a significant boost in tourism and real estate sales in Antigua in the coming years.
The conservative party, led by Boris Johnson won a landslide victory at the polls which will have a number of future ramifications for the UK and Antigua.
Historically visitors and investors from the UK have dominated the tourism and property market in Antigua. From a real estate perspective the majority of homes sold to foreign investors came from the UK, in the past few years however UK investors have reduced in number pushing the proportion more toward buyers from North America.
One of the main reasons for this change in market dynamics has been due to the currency exchange rates from GBP to USD. UK buyers use their GBP to purchase USD or Eastern Caribbean Dollars, (pegged to the USD), to spend in Antigua. As the value between the two currencies has changed so has the spending power of the UK market in a USD based economy such as Antigua.
In 2008 £1 was worth almost US$2, which lead to a booming real estate and tourism market in Antigua dominated by UK buyers and tourists. At the end of 2015 the rate had moved down giving approximately £1 : US$1.55, therefore from the perspective of a UK citizen, a house or holiday in Antigua had become 50% more expensive due to the weakened GBP currency.
In February 2016 the UK Brexit referendum was announced and resulted in a decision by the British People to leave the European Union, this result lead to uncertainty as to what might happen in Europe and in the UK. This uncertainty caused the value of the £GBP to drop further to a low of £1 : US$1.23.
Since then the rate has remained at a similar figure; to put this in context, due to the exchange rate change between 2008 and 2018, a holiday in Antigua for a UK visitor had become almost 80% more expensive.
Due to those increasing costs tourism and real estate purchases have suffered from one of the main feeder markets of Antigua.
So back to the UK election result; the new government now has a strong majority in Parliament which has lead to a significantly stronger position for the GBP against the US dollar which has risen almost 4% overnight. The UK will be able to leave the EU and arrange new trade deals which should further strengthen the GBP in the coming years.
This strengthening means that UK holiday-makers will have more money to spend when they arrive in Antigua which is good news for Antigua tourism and the property market.
Data and image provided by Morningstar