Caribbean Property & Investment Review: 2023 in Review and the Outlook for 2024

Publication Date: 3 January 2024  |  Coverage Period: 3 December 2023 – 2 January 2024

Morning Briefing

• Caribbean tourism closed 2023 as a record year for most destinations, with the Caribbean Tourism Organisation confirming that regional stopover arrivals surpassed 2019 pre-pandemic benchmarks for the first time since the COVID-19 crisis, a milestone that underpins the property investment case across the region.
• Guyana’s oil production reached approximately 400,000 barrels per day by year-end 2023, with the ExxonMobil-led Stabroek Block continuing its expansion trajectory and driving GDP growth that the IMF projected at over 30 percent for the full year — the fastest economic growth rate of any country in the Western Hemisphere.
• Caribbean property markets demonstrated resilience in 2023 despite the sustained high-interest-rate environment, with luxury and tourism-adjacent segments posting price growth while affordable housing segments faced worsening affordability metrics.
• Jamaica ended 2023 with fiscal accounts in surplus for a second consecutive year, with the Bank of Jamaica holding its policy rate at 7.00 percent and signalling that rate reductions may be considered as inflation continues to decelerate toward its target range.
• The Caribbean Development Bank’s 2023 annual review highlighted the dual challenge facing the region: historically strong tourism performance generating growth and fiscal space, while housing affordability and infrastructure deficits constrain inclusive development.
• Remittances to Caribbean economies reached record levels in 2023, with Jamaica receiving an estimated US$3.8 billion from the diaspora — a flow that supports household consumption, property purchases, and informal mortgage repayments across the island.

2023: The Year Caribbean Tourism Fully Recovered

If there is a single defining story for the Caribbean economy in 2023, it is the full and emphatically convincing recovery of regional tourism to and beyond pre-pandemic levels. The Caribbean Tourism Organisation’s preliminary full-year data confirms what island-level reports had been signalling throughout the year: the 2023 visitor season surpassed 2019 in aggregate stopover arrivals, marking the completion of the post-COVID recovery arc and the beginning of what regional tourism authorities are positioning as a new growth phase.

The implications for Caribbean property markets are profound and multi-layered. Tourism recovery drives hotel occupancy and room rates, which in turn justify new hotel construction and renovation investment. It drives short-term rental demand, validating the investment thesis for property buyers who have acquired or converted residential assets for platform rental. It generates employment income that supports household purchasing power in destination communities. And it generates government tax revenues — from airport departure taxes, hotel room levies, and broader VAT on tourism expenditure — that fund the infrastructure investment underpinning property market foundations.

Jamaica’s Jamaica Tourist Board reported the island’s best year on record, with stopover arrivals approaching 3.2 million for the full year and cruise passenger calls adding substantially to total visitor numbers. The north coast resort corridor maintained high occupancy throughout the year, with the typically quieter shoulder months of May and June showing unusually strong demand as visitors sought to avoid both Northern Hemisphere summer heat and Caribbean hurricane season uncertainty.

Barbados, the Dominican Republic, the Cayman Islands and St Lucia each reported record or near-record arrivals. The Dominican Republic, in particular, extended its position as the Caribbean’s single largest tourism economy, with Punta Cana’s enormous all-inclusive resort capacity and the country’s aggressive airline route development strategy driving arrivals well above eight million for the year. The Cayman Islands, operating at the luxury end of the market spectrum, reported record per-visitor expenditure even as raw arrival numbers remained capacity-constrained.

Guyana’s Oil Economy: Reshaping the Caribbean’s Economic Landscape

Guyana’s emergence as a significant oil producer has been the most consequential structural economic development in the Caribbean over the past five years, and 2023 was the year that transformation began to register at a genuinely material scale. With production from the ExxonMobil, Hess and CNOOC-operated Stabroek Block reaching approximately 400,000 barrels per day by year-end, Guyana has established itself as one of the fastest-growing oil producers in the world — a remarkable achievement for a country of 800,000 people with no prior significant hydrocarbon production history.

The economic impact is staggering in per capita terms. IMF projections place Guyana’s GDP growth for 2023 at over 30 percent — a figure that is almost without precedent in the economic history of any country outside of conflict-recovery situations. The oil revenues are flowing into the Guyanese state through the Natural Resource Fund, with significant allocations toward infrastructure, education, health and housing that are fundamentally transforming a country that was, for most of its history, among the poorer nations in the Western Hemisphere.

Georgetown’s property market has been transformed by the oil boom. Commercial real estate demand from energy sector operators, international service companies, financial institutions and professional services firms has driven office and retail rents to levels that are, for the Guyanese market, extraordinary. Residential property prices in the most desirable Georgetown neighbourhoods — Bel Air, Campbellville, Lamaha Gardens — have appreciated at rates that are difficult for local buyers not connected to the energy sector to absorb. An influx of expatriate professionals on energy sector packages has created a premium rental market that did not exist five years ago.

For investors across the Caribbean and beyond, Guyana represents the region’s most compelling growth story but also its most idiosyncratic investment environment. The legal and regulatory frameworks for property ownership, the banking infrastructure for foreign buyers, and the transparency of title and transaction processes are all still developing to match the pace of economic transformation. Those who have moved early into the Georgetown market have, in most cases, been well rewarded; those considering entry now face a market that has already priced in substantial optimism about the oil economy’s trajectory.

Interest Rates: The Defining Constraint on 2023 Property Markets

Against the backdrop of tourism recovery and Guyana’s oil boom, the defining constraint on Caribbean property markets in 2023 was the sustained high-interest-rate environment generated by global monetary tightening. The US Federal Reserve completed its hiking cycle in July 2023 at 5.25–5.50 percent — the highest US policy rate since 2001 — and held rates at that level for the remainder of the year. Caribbean central banks followed trajectories calibrated to their own inflation and exchange rate dynamics, but the broad outcome was a regional mortgage market operating at borrowing costs that were, for first-time buyers and middle-income households, effectively prohibitive.

Transaction volume data across major Caribbean markets shows the impact clearly. In markets where reliable data is available — Jamaica, Barbados, Trinidad and Tobago — residential mortgage originations declined year-on-year in 2023, driven by the combination of high borrowing costs, elevated property prices (the legacy of strong demand in 2021–22) and stagnant real wage growth in many segments of the labour market. The luxury segment, dominated by cash buyers and overseas purchasers financing through foreign mortgage products, was partially insulated from these dynamics and continued to transact actively. The middle market and affordable housing segment bore the full weight of the rate environment.

Jamaica’s Bank of Jamaica ended 2023 signalling a more dovish posture than at any point since it began tightening in 2021. With inflation decelerating toward the 4 to 6 percent target range, the monetary policy committee indicated openness to rate reductions in 2024 if the trajectory continued. This signal was not lost on the market: mortgage brokers and real estate agents across the island report that some prospective buyers are deliberately deferring purchase decisions in the hope of lower financing costs in the months ahead — a ‘wait and see’ dynamic that is itself suppressing transaction volumes.

2024 Outlook: What Caribbean Property Markets Can Expect

The 2024 outlook for Caribbean property markets is shaped by the interaction of several powerful forces operating in different directions. On the positive side: tourism demand remains structurally strong, the Caribbean’s appeal to remote workers and lifestyle migrants shows no sign of abating, Guyana’s oil economy continues to expand, and the possibility of US Federal Reserve rate cuts in 2024 — if they materialise — would provide meaningful relief to mortgage markets across the region.

On the challenging side: housing supply constraints are worsening in most Caribbean markets, construction costs remain elevated relative to pre-pandemic norms, climate risk and insurance costs are rising, and the regulatory environment for short-term rentals is becoming more complex. The housing affordability crisis, particularly acute for first-time buyers and middle-income households, shows no sign of resolution without significant policy intervention that most Caribbean governments have not yet committed to at the required scale.

The Caribbean Development Bank’s assessment of the region’s economic prospects for 2024, released in its year-end review, was cautiously optimistic: tourism revenues are expected to remain strong, fiscal positions are generally improving, and the external debt burden, while significant in some territories, is broadly manageable. The CDB flagged climate adaptation investment and housing as the two areas where the gap between need and current resource allocation is most acute — a judgment that aligns closely with what property market practitioners observe at ground level.

Caribbean Leaders This Month

Guyana closes 2023 as the Caribbean’s undisputed economic growth leader, with oil production and GDP expansion at rates that dwarf every other regional economy. The Georgetown property market reflects this dynamism, with commercial and premium residential values posting appreciation that would be remarkable in any global context.

Jamaica completed a second consecutive year of fiscal surplus, a milestone that reflects the discipline of the IMF-guided fiscal consolidation programme that the government has maintained across multiple administrations. The property market remained resilient despite mortgage market headwinds, with Kingston residential values broadly stable and tourism-adjacent assets continuing to appreciate.

Dominican Republic extended its record as the Caribbean’s largest tourism economy and among its most dynamic construction markets, with the Punta Cana corridor and the greater Santo Domingo metropolitan area absorbing substantial foreign investment across the hospitality and residential sectors.

Barbados under Prime Minister Mia Mottley continued to successfully position itself as a premium destination and reform-minded economy, with the Barbados Welcome Stamp digital nomad visa attracting long-stay residents whose spending has supported the retail, hospitality and property rental markets.

Cayman Islands maintained its status as the region’s ultra-luxury property market of reference, with Seven Mile Beach transaction prices continuing to set records per square foot and the financial services sector providing a stable base of high-income demand.

Trinidad and Tobago delivered a solid year underpinned by energy sector revenues and the ongoing strength of the commercial property market in Port of Spain’s financial and professional services district.

St Lucia posted record tourism arrivals and continued to attract resort investment, with the Sandals and other international hotel brands maintaining or expanding their presence on the island.

Grenada continued to successfully leverage its CBI programme to attract real estate investment, particularly in approved resort developments, while building a reputation as one of the Eastern Caribbean’s most attractive second-home markets. Overall 2023 regional performer: Guyana, for an economic expansion that has no parallel in the contemporary Caribbean and is reshaping the region’s economic geography.

Looking Ahead

The Caribbean property market enters 2024 with significant momentum in its tourism and investment segments, but with unresolved structural challenges in housing affordability and supply that will define the policy agenda for the year. The question of when and how quickly interest rates will fall — globally and regionally — will be the single most consequential variable for mortgage market volumes and first-time buyer activity.

Guyana’s continued oil production expansion will remain the region’s most powerful growth story, with second-order effects on the broader Caribbean economy through tourism, trade and investment linkages that are still developing. How Guyana manages its resource revenues — through the Natural Resource Fund and public investment decisions — will be watched closely by development economists and sovereign wealth managers globally.

Diaspora remittances, which reached record levels in 2023, will continue to play a critical role in financing household property purchases across the region, particularly in Jamaica where the diaspora is deeply embedded in the residential property market as both buyers and as financiers of family home construction. This informal financing channel, while outside formal mortgage statistics, is arguably as important to Caribbean housing market outcomes as the formal mortgage system.

The Caribbean Property & Investment Review is published monthly and covers developments during the preceding calendar month. All factual statements reflect information publicly available at the time of publication.