Across the region, prime residential property markets have seen an increase both in transactions and pricing since 2019.
Lucy Palk
Since the lifting of travel restrictions, international buyers have returned to the region in large numbers with branded residences proving popular
The Caribbean offers a high quality of life, beaches, open space, a warm climate, and is particularly appealing for those looking to escape northern-hemisphere winters. Between December and April, hotels and second homes across the region are full of people searching for winter sunshine and warmth. Average temperatures for these five months range from 24 degrees centigrade in the Bahamas to 28 degrees in St Lucia.
People are willing and able – thanks to hybrid working – to spend longer away from their primary base, benefiting the Caribbean in particular. Stays which previously lasted two weeks are stretching into two months, or longer. Several islands have embraced remote working and have targeted ‘digital nomads’ by offering remote-working visas.
The Bahamas offer the Bahamas Extended Access Travel Stay (BEATS), Antigua offers the Antigua Nomad Digital Residence, and Barbados provides the Barbados Welcome Stamp for temporary residents.
As with prime markets in major global cities, location and access to amenities are key determinants of property pricing. In the Caribbean, beach front properties command higher prices, a trend made more acute by a shortage of beachfront stock. Easy access to airports, beach clubs, golf courses and marinas are all favoured and properties in closer proximity often command higher values.
Across the region, prime residential property markets have seen an increase both in transactions and pricing since 2019. Although hampered by the global pandemic, the lifting of international travel restrictions and improvisation of agents proved fundamental to maintaining the markets momentum. Buyers have returned to the region in large numbers looking for second or retirement homes. Prime prices range from $650 per square foot for off the beach villas in Antigua to $2,780 per square foot for villas on the beach in the Cayman Islands.
One interesting development in recent years has been the growth of branded residences in the Caribbean, particularly appealing to buyers seeking hassle-free ownership, security of a known-brand, and a rich amenity offer. The Bahamas comprises the largest supply of branded residences units with a 27% market share, followed by Cayman Islands (26%) and Turks and Caicos Islands (23%). Overall supply across these eight islands is set to double over the next five years to more than 1,500 units as demand for these types of properties continues to grow.
International buyer profiles in the Caribbean vary by island, but primarily come from the United States and Canada, the United Kingdom and elsewhere in northern Europe, but there is representation from across the globe. They tend to be over 40 years old, self-employed, self-made, or retired.
The weakening global economic outlook, coupled with rising interest rates are a headwind for property markets worldwide, but most purchasers in the region are less reliant on debt financing. For many, buying a property in the Caribbean is a purchase of passion rather than a purely investment decision, and there exists a strong rental market across the region as many owners choose to rent out their properties, at least for part of the year. Good returns can be achieved, particularly given the limited supply of properties and high demand during the peak winter season.