Caribbean Property & Investment Review: Mid-Year 2024 Six-Month Special Edition

Publication Date: 4 July 2024  |  Coverage Period: 4 January – 3 July 2024  |  Special Edition: Six-Month Review

Mid-Year 2024 Morning Briefing

• Caribbean post-COVID tourism recovery is now complete, with the region delivering record stayover arrivals and hotel revenue in the 2023/24 winter season across virtually every major destination — a milestone that is fundamentally reshaping the hospitality real estate investment case.
• US and global interest rates remain at elevated levels as of mid-2024, with the Federal Reserve having maintained its policy rate near a 23-year high; Caribbean mortgage markets have consequently experienced suppressed origination volumes as buyer affordability has been squeezed, though most market participants expect rates to begin easing before year-end.
• Guyana’s Stabroek Block oil production is approaching the 600,000 barrel per day threshold, a level that has generated extraordinary real estate demand in Georgetown and is positioning the country as a transformative economic story in the Caribbean and beyond.
• Caribbean hotel investment is tracking at record levels in the first half of 2024, with an unprecedented pipeline of branded and independent hotel projects under construction, in financing, or in advanced planning across Jamaica, the Dominican Republic, Turks and Caicos, Bahamas, and the Eastern Caribbean.
• Caribbean housing supply deficits have deepened through the first half of 2024, with construction costs remaining elevated, labour shortages persistent, and new housing delivery across all market segments falling short of the demand that population growth, urbanisation, and diaspora purchasing power are generating.
• Barbados’s West Coast luxury market has performed exceptionally well through the first half of 2024, with benchmark transaction prices reaching new highs and the island’s digital nomad visa community adding a structural layer of rental demand that has tightened available stock.
• Jamaica’s infrastructure investment programme — spanning highway expansion, port development, and urban regeneration — is creating new property market corridors and improving the investment thesis for residential and commercial development in previously underserved areas.
• The Dominican Republic’s construction boom has continued unabated through the first half of 2024, with new resort and residential development in Cap Cana, Punta Cana, and Las Terrenas absorbing international buyer demand at price levels that represent new benchmarks for the Caribbean luxury market.

Post-COVID Tourism: The Recovery Is Complete and Records Are Falling

The narrative of Caribbean tourism in mid-2024 is no longer one of recovery — it is one of record-setting performance and the structural implications of a region that has returned to, and in many cases surpassed, the peak tourism economics of the pre-pandemic era. The 2023/24 winter season — running from October 2023 through April 2024 — delivered stayover arrival figures that set new historical records across Jamaica, the Dominican Republic, the Cayman Islands, Barbados, and a majority of Eastern Caribbean destinations. Hotel occupancy, average daily rates, and revenue per available room — the hospitality industry’s core performance metrics — all reached levels in the peak season that validated the aggressive hotel investment decisions that international brands and regional operators have been making over the past two to three years.

The drivers of this exceptional performance are structural rather than cyclical. North American leisure travel demand for Caribbean destinations has proved remarkably durable through the cost-of-living challenges of the post-pandemic period. The Caribbean’s combination of short flight times from major US and Canadian cities, established resort infrastructure, warm climate, and increasingly sophisticated tourism product has maintained and grown its share of the North American outbound leisure travel market. European demand has also recovered strongly, with UK, German, and Scandinavian visitors returning to the Caribbean in numbers that match or exceed pre-COVID levels. The Latin American middle-class tourism market — particularly from Colombia, Brazil, and Mexico — continues to grow as a meaningful supplementary demand stream for the Dominican Republic and the Spanish-speaking Caribbean.

For Caribbean property markets, the tourism record has several important implications. Most directly, it validates the investment case for hotel and resort development at a moment when the construction pipeline is at a multi-decade peak. Hotel developers and their financing partners who made commitments when the COVID-era recovery trajectory was still uncertain are now seeing their bets pay off in the form of strong operating metrics and improving asset valuations. The hospitality real estate sector’s strength has spillover effects across Caribbean property markets: hotel workers require housing, international visitors become prospective buyers of vacation homes and investment condominiums, and hotel brand presence in a destination typically anchors broader price appreciation in surrounding residential and commercial property.

Short-term rental platforms have become an integral part of the Caribbean tourism ecosystem, and their property market implications are significant. In Jamaica, Barbados, and Puerto Rico, Airbnb listing volumes have grown substantially in the first half of 2024, and the income potential of short-term rental properties has become a standard part of the investment calculus for buyers of coastal and tourist-area residential property. This income premium on tourism-area residential property is one of the forces driving price appreciation that simultaneously benefits existing owners and makes market entry more difficult for local first-time buyers who cannot compete with investors underwriting to tourist-rental income.

The Rate Environment: Peak Rates and the Wait for Relief

The US Federal Reserve’s policy rate has remained near its 23-year peak through the first half of 2024, and the anticipated rate reductions that Caribbean mortgage market participants have been expecting have not yet materialised. The Fed’s data-dependent approach — conditioning rate cuts on clear evidence of inflation returning to the 2 percent target — has meant that, despite earlier market expectations of multiple cuts in 2024, the first reduction has been pushed back, with most market observers now expecting the initial cut to come in September or later in the year. For Caribbean property markets, this delay has extended the period of mortgage market suppression that began when the Fed started hiking rates in March 2022.

The practical consequences for Caribbean mortgage origination have been significant. In Jamaica, the NHT reported a meaningful decline in mortgage applications in the first quarter of 2024 compared with the equivalent period of 2022, before the rate hiking cycle began. First-time buyers, whose affordability is most sensitive to monthly payment levels, have been disproportionately affected, with many choosing to extend their rental period rather than commit to homeownership at current rates. Investment buyers — typically wealthier individuals purchasing with larger equity contributions or from diaspora savings — have been more resilient, and the upper segments of the market have sustained activity even as the first-time buyer segment has contracted.

The Caribbean property market’s experience of the elevated rate period illuminates important structural characteristics of the region’s mortgage markets. Unlike the US, where 30-year fixed-rate mortgages allow borrowers to lock in rates for extended periods, most Caribbean markets feature variable-rate or shorter-term fixed-rate mortgage products. This means that existing Caribbean mortgage holders have been more directly exposed to rate movements than their US counterparts, with monthly payments rising as rates have increased. For some households, this has created genuine financial stress and, in a small number of cases, has contributed to mortgage arrears that banks and the NHT are managing through restructuring programmes.

The consensus expectation among Caribbean property market participants is that the rate environment represents a temporary headwind rather than a structural change. Most serious buyers in the region’s primary markets — Kingston, Bridgetown, Nassau, Georgetown, and the Dominican Republic’s resort corridors — are factoring in an expectation of rate relief in the second half of 2024 and through 2025. Real estate agents report that buyer enquiries remain healthy even as final transactions have been suppressed, suggesting that latent demand is accumulating that will express itself in transaction volumes once rate relief materialises. The second half of 2024 is consequently being watched with considerable anticipation by Caribbean property market stakeholders.

Guyana: Approaching the 600,000 Barrel Milestone

Guyana’s oil production trajectory through the first half of 2024 is one of the most consequential economic stories in the Caribbean. The ExxonMobil-led Stabroek Block consortium has continued to add production capacity through successive FPSO vessel deployments, and output is approaching the 600,000 barrel per day threshold that analysts have identified as a defining milestone for the Guyanese economy’s transformation. At this production level, Guyana’s per-capita oil revenues place the country in a select group of significant global oil producers, and the fiscal implications for a nation of less than one million people are extraordinary.

Georgetown’s real estate market has been transformed by the oil boom in ways that are visible across every property category. The commercial office sector, essentially a nascent market as recently as 2020, has developed into a functioning asset class with institutional-grade tenants, improving building standards, and rents that reflect genuine scarcity of quality space. International hotel development in Georgetown — anchored by the Marriott that opened ahead of the oil boom’s full materialisation — has been supplemented by several additional brand commitments that are now in various stages of construction or planning. The residential market in Georgetown’s established premium neighbourhoods has seen appreciation that has enriched existing property owners while creating genuine affordability challenges for ordinary Guyanese households.

The East Bank Demerara corridor between Georgetown and the oil sector’s operational zone has become one of the most intensively developing real estate markets in the Caribbean. Land values along the corridor have appreciated dramatically as developers, logistics companies, and residential builders compete for sites. The Guyanese government’s infrastructure investment programme — road improvements, utilities expansion, and the ongoing Demerara Harbour Bridge replacement project — is creating the physical infrastructure needed to sustain this development intensity, though the pace of public investment struggles to keep pace with private sector demand. Regional investors from Trinidad and Jamaica have been among the first movers in the Georgetown commercial market, and international institutional capital is beginning to assess the opportunity more seriously.

The broader regional economic implications of Guyana’s oil wealth are still in the early stages of becoming apparent. Oil services companies, engineering firms, and professional service providers who have established Caribbean regional headquarters — typically in Trinidad or Barbados — are now evaluating whether to establish direct Guyanese presences. The country’s membership in CARICOM creates a framework for regional labour mobility that could, over time, attract skilled Caribbean workers to Guyana in meaningful numbers. For regional property markets, the indirect effects of Guyana’s success — through supply chain linkages, service sector growth, and the demonstration effect on other Caribbean territories’ development ambitions — are worth monitoring.

Caribbean Hotel Investment: A Record Development Pipeline

The Caribbean hotel investment pipeline in the first half of 2024 is at its deepest in the modern history of the regional hospitality industry. The combination of post-COVID demand validation, improving hotel operating metrics, and competitive pressure among international brands to secure positions in the Caribbean’s most desirable locations has driven a wave of development commitments that will reshape the regional hospitality landscape over the next three to five years. The Caribbean Hotel and Tourism Association’s development tracker shows projects under construction, in advanced planning, or in active financing that aggregate to tens of thousands of new hotel rooms across the island arc — a scale of development that has not been seen since the 1990s.

Jamaica is at the epicentre of this development activity. The north coast hotel corridor from Montego Bay through Falmouth to Ocho Rios is hosting multiple simultaneous projects at various stages of development, with brands including Marriott, Sandals, and several lifestyle and boutique operators either under construction or in advanced pre-construction phases. The Jamaican government’s tourism development strategy has been designed to facilitate exactly this kind of investment activity, with the Tourism Enhancement Fund, streamlined development approvals, and infrastructure investments in road access and utilities supporting the hotel pipeline. The employment and ancillary economic activity that hotel construction and subsequent operations generate are significant contributors to Jamaica’s economic performance.

The Dominican Republic’s hotel development market operates at a scale that no other Caribbean territory can approach. The Cap Cana and Punta Cana corridors, already among the most densely developed resort zones in the Caribbean, are receiving further investment in both new branded hotels and luxury residential developments that are intertwined with the resort infrastructure. Several multi-billion-dollar integrated resort projects — combining hotel rooms, residential units, golf courses, marinas, and retail — are in various stages of completion or construction in the DR, representing a concentration of investment that is unique in the region. The DR’s tourism ministry has consistently delivered on its commitments to improve air connectivity, which has brought additional source markets within reach and sustained the demand that fills these expanding room counts.

In the Eastern Caribbean, the Citizenship by Investment programme framework continues to direct hotel investment into approved developments in St Kitts, Dominica, Antigua, Grenada, and St Lucia. CBI-approved hotel developments represent a unique financing mechanism in which the hotel construction is partly funded by investor citizenship application fees, reducing the reliance on conventional construction financing and making projects feasible in smaller island markets that might otherwise struggle to attract development capital at the scale needed to bring international brands on board. The quality of CBI-linked hotel developments has improved significantly over the past decade as programme governments have raised due diligence standards and minimum investment thresholds.

Housing Supply Deficits and the Affordability Challenge

The Caribbean’s housing supply deficit is one of the region’s most persistent and consequential structural property market challenges, and the first half of 2024 has not brought the progress in addressing it that policymakers have committed to. Across the region, new housing delivery — measured against the demographic demand created by population growth, household formation, and urbanisation — falls systematically short of what the market requires. The gap is most acute in the affordable and lower-middle-income segments, where commercial developers face economics that make profitable delivery at accessible price points very difficult without public subsidy or concessionary financing.

In Jamaica, the National Housing Trust has remained the primary mechanism through which affordable housing reaches the market, but the NHT’s own production is insufficient to address the scale of the deficit. The agency’s housing schemes in the Kingston metropolitan area — concentrated in areas like Portmore, Spanish Town, and the Greater Kingston periphery — have seen sustained demand that consistently outstrips supply. The elevated construction cost environment of the post-COVID period — driven by global steel and concrete prices, increased shipping costs for imported materials, and labour market tightening — has further compressed the economics of affordable housing delivery and added to the gap between committed project timelines and actual delivery.

Caribbean construction cost inflation has been one of the most significant structural shifts affecting property markets in the past two to three years. The combination of COVID-era supply chain disruption, the commodity price shock associated with the Russia-Ukraine conflict, and the persistent structural challenge of Caribbean import dependence for key building materials has pushed construction costs to levels that have fundamentally altered feasibility calculations for projects across all market segments. Developers in Barbados, Jamaica, and the Eastern Caribbean report that construction cost increases of 30 to 50 percent compared with pre-COVID benchmarks are now incorporated into project budgets as a baseline assumption rather than an outlier scenario.

Climate resilience requirements are adding further complexity to the housing supply challenge. Building code updates across the region — driven by the lessons of recent hurricane seasons and the requirements of international development finance institutions — are incorporating more stringent wind resistance, foundation, and storm surge protection standards into construction requirements. These requirements increase construction costs but also improve the long-term durability and insurability of the housing stock being produced. For affordable housing delivery, the challenge is finding ways to incorporate these resilience requirements without pushing per-unit costs beyond the reach of the income levels the programmes are designed to serve.

Caribbean Leaders This Half: Territory-by-Territory Assessment

Jamaica enters the second half of 2024 with strong tourism fundamentals and a property market that is navigating the challenges of elevated rates and construction cost inflation with reasonable resilience. The north coast hotel corridor’s development pipeline will sustain economic activity through the construction period and create employment and income multipliers when projects open. The Kingston metropolitan property market remains supply-constrained at all price points, and the NHT’s planned expansions — contingent in part on improving borrowing cost economics as rates ease — are being watched closely. Jamaica’s infrastructure investment programme, particularly the Highway 2000 extension and port development, is creating new property market corridors that investors are beginning to assess.

Dominican Republic is the Caribbean’s property market leader by virtually every quantitative measure in mid-2024. The scale of hotel and resort development underway, the depth of the luxury residential market’s international buyer base, and the country’s macroeconomic performance — consistently among Latin America and the Caribbean’s growth leaders — create a property market ecosystem that no island competitor can approach in absolute terms. The DR’s development of its industrial free zone sector and its growing digital economy also add economic diversification that makes the country’s property market less vulnerable to tourism cycle volatility than purely tourism-dependent Caribbean territories.

Barbados has had an excellent first half of 2024. West Coast luxury real estate has set new benchmark prices, the digital nomad visa community has matured into a stable structural demand element for the rental market, and the island’s governance quality and fiscal reform credentials continue to attract international capital. Barbados’s challenge is that its geographic constraints mean that supply of desirable property is fundamentally limited, which sustains prices at levels that are increasingly disconnected from local income levels and represents a structural equity challenge that the government has yet to fully resolve.

Guyana stands alone in the Caribbean property market landscape of mid-2024. Georgetown’s commercial and residential real estate boom — driven by oil sector demand that is unlike anything animating other Caribbean markets — creates a risk-return profile that sophisticated investors are beginning to engage with seriously. The legal, title, and governance infrastructure is improving but remains less developed than the market’s ambitions, and investors require careful due diligence that goes beyond standard Caribbean market practice.

Trinidad and Tobago maintains fiscal stability through its LNG revenues, providing a foundation for domestic economic activity that supports the high-end residential market’s performance. Trinidad’s property market is mature relative to many Caribbean peers, with established legal and financing infrastructure, but also characterised by pricing in premium areas that reflects the professional class’s oil-sector incomes rather than the broader population’s purchasing power. Tobago’s eco-tourism property market is developing interest from niche investors, with several boutique resort and villa projects attracting serious attention.

Cayman Islands maintains its position as the Caribbean’s luxury real estate benchmark. Seven Mile Beach property values remain at extraordinary levels by any regional comparison, reflecting genuine scarcity of high-quality beachfront property, exceptional governance and infrastructure quality, and a no-direct-tax regime that makes ownership economics particularly attractive for high-net-worth international buyers. The Cayman property market is perhaps the most institutionally mature in the Caribbean, with well-established legal frameworks, title security, and professional services that meet international institutional investor standards.

Turks and Caicos Islands is in the midst of a property market transformation driven by a hotel and resort development wave that is establishing Providenciales as one of the Caribbean’s leading luxury destinations. Grace Bay Beach’s combination of extraordinary natural quality and improving branded resort infrastructure is attracting North American buyers who might previously have defaulted to the Bahamas or Cayman Islands. The islands’ no-tax environment and improving air connectivity have accelerated this trend.

St Lucia continues to benefit from CBI-driven hotel and villa development, with the Soufrière Bay area attracting luxury resort operators drawn by the UNESCO World Heritage Pitons environment. The island’s combination of natural beauty, improving air routes from the US, and an active CBI programme creates a compelling investment environment for hospitality and premium residential development. Several significant international hotel brands have expressed or confirmed commitments to the island in the first half of 2024.

Bahamas has maintained strong tourism performance and property market activity through the first half of 2024. The Nassau luxury market — anchored by Albany and the Ocean Club properties — and the growing Family Islands eco-resort segment each represent active stories. The Bahamas’ geographic proximity to the US market and its established ultra-luxury positioning ensure that North American buyer demand remains a durable foundation for property market performance.

Overall First-Half 2024 Performer: Dominican Republic. In a period characterised by elevated interest rates and construction cost pressures that have challenged property market performance across the region, the Dominican Republic’s combination of scale, economic resilience, tourism records, and international buyer depth has delivered a first-half 2024 property market performance that is unmatched elsewhere in the Caribbean. The DR’s sustained status as the region’s most active and liquid property market makes it the first-half standout for the second consecutive year.

Looking Ahead: The Second Half of 2024

The most consequential external variable for Caribbean property markets in the second half of 2024 is the trajectory of US interest rates. Market consensus — as of this publication — holds that the Federal Reserve will begin cutting rates before year-end, with September being the most commonly cited first-cut timing. If this expectation is realised, Caribbean mortgage markets should begin to see improved origination conditions in the fourth quarter of 2024 and through 2025, releasing the pent-up demand that has accumulated among buyers who have deferred purchase decisions pending rate relief. The magnitude and pace of cuts will determine how quickly and comprehensively this release occurs.

The 2024 Atlantic hurricane season, which opened on 1 June, is already demonstrating the concerns that pre-season forecasters raised about elevated sea surface temperatures and above-normal activity. Hurricane Beryl’s historically early-season intensity in early July has served as a sobering reminder that the weather risk dimension of Caribbean property market analysis cannot be treated as a background variable. Caribbean property owners, investors, and developers who have not yet fully integrated climate risk into their asset management and underwriting frameworks should treat the 2024 season as motivation to do so.

The US presidential election in November 2024 is a potential market-moving event for Caribbean economies and property markets. While Caribbean tourism demand has historically shown resilience across US political transitions, the specific policy priorities and trade policy orientation of a second Trump or continuing Biden/Harris administration could have meaningful implications for CBI demand, US-Caribbean trade relations, and the broader investor sentiment toward emerging market Caribbean property. Caribbean governments and investment professionals are watching the election campaign with considerable attention.

Overall, the Caribbean property market enters the second half of 2024 in a position that, while tested by elevated rates and construction cost pressures, retains the structural foundations for sustained performance. Tourism is delivering records. Guyana’s oil-driven growth is creating extraordinary opportunity. Hotel investment is at unprecedented levels. And the rate cycle’s eventual turn — anticipated but not yet delivered as of this mid-year publication — promises to release significant pent-up demand. The second half of 2024 will be one to watch closely.

The Caribbean Property & Investment Review Six-Month Special Edition is published twice yearly, in January and July, providing extended analysis of regional real estate and investment trends across the full six-month review period. All market assessments and economic data reflect information available as of the publication date of 4 July 2024.