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Investment analysts for the Fortress Caribbean Property Fund have painted a bleak picture of the region’s real estate market. Terry Hanton, managing director of Property Consultancy Services Inc., and Paul Altman, managing director of Altman Real Estate, said sales of lots and low- to middle-income houses had declined significantly because of general caution and potential buyers’ lost purchasing power. Moreover, they noted that housing developments which had been modestly successful in 2010 found it very difficult to sell homes in 2011. “Rental rates for good quality residential developments have declined 15 to 20 per cent as landlords try to stimulate a relatively static demand curve,” they said in the 2011 annual report of the fund which is managed by Fortress Fund Managers. Hanton and Altman said there had been limited recovery in the volume of luxury residential sales in Barbados, largely driven by the increase in wealth in Britain due to recovery in the equity markets. However, they said prices remain depressed. The analysts added that there had been very few transactions in commercial buildings in Barbados and the Eastern Caribbean despite the fact that market values were significantly lower than replacement cost. “The construction of new commercial buildings in Warrens, Holetown and the suburbs of Bridgetown have increased vacancy in older buildings. “The demise of CLICO throughout the Caribbean has left a number of new commercial buildings unfinished or with substantial vacancy. “In one case in Barbados, the building is likely to sell at around or less than 50 per cent of the build cost,” they said. While Hanton and Altman said rental rates had remained relatively static for a 12-month period and were buoyant in some areas, they noted that increased vacancy in Bridgetown had led to reduced rates. “Our view is that the Caribbean economies are in for a rough ride over the next few years and the fund needs to be very cautious with its investment strategy,” they said, noting that further residential investments will be discouraged.