Diaspora Buyers: An Asset to Jamaica’s Market and a Tension Within It

Kingston, Jamaica — 14 August 2023

Property markets around the world are adjusting to a new reality: the diaspora buyer is no longer an occasional participant but a structural feature of many residential markets in developing and emerging economies. For Jamaica, where the overseas community spans several generations and encompasses hundreds of thousands of households across North America, the United Kingdom and beyond, diaspora demand has become one of the most consistent and consequential forces shaping the property market. Understanding how it works, and what it means for local buyers, sellers and developers, is increasingly essential.

Who the Diaspora Buyer Is

Diaspora property buyers do not form a monolithic group. Some are returning Jamaicans planning for retirement, purchasing a home they intend to occupy within five or ten years. Others are first-generation emigrants maintaining family ties by supporting property acquisition for relatives who remain on the island. A growing segment are second and third-generation overseas Jamaicans treating property as an investment, drawn by the appeal of an asset tied to their cultural identity and priced in a market they understand at least partially through family knowledge.

What these buyers share is access to income denominated in hard currency, primarily US dollars, Canadian dollars and British pounds. In a market where prices are quoted in Jamaican dollars but construction costs and some aspirational property segments are influenced by foreign exchange dynamics, buyers with hard currency income have a structural advantage. Their purchasing power relative to the local market has, in many periods, been substantially higher than that of comparable domestic earners.

How Diaspora Demand Shapes the Market

The influence of diaspora buyers on Jamaica’s property market is felt most visibly in certain geographic zones and price segments. Communities with strong diaspora connections, including parts of St Andrew, St Catherine, Manchester and St James, see sustained demand from overseas buyers that supports prices above what purely local demand would sustain. In the tourism corridor, diaspora buyers overlap with international investor demand in a way that has historically kept certain property types liquid and relatively well-priced.

This is a genuine economic benefit. Diaspora property purchases bring foreign exchange into the economy, support employment in the construction and real estate sectors, sustain demand during periods when the domestic market softens, and provide a level of price support that makes investment in the housing stock more attractive over the long term. The Bank of Jamaica has noted that roughly fifteen per cent of the commercial mortgage stock relates to overseas customers, the majority of whom are purchasing property in Jamaica.

The Tension for Local Buyers

The same dynamic that benefits the market as a whole creates a specific pressure for local buyers competing in the same segment as diaspora purchasers. When a property in a desirable community can attract a cash offer from an overseas buyer at a price that a local mortgage borrower cannot match, the local buyer loses. This is not a criticism of the diaspora buyer, who is exercising perfectly rational economic behaviour. It is an observation about the market structure.

In neighbourhoods where diaspora demand is concentrated, local first-time buyers face a market in which their qualifying mortgage amount is insufficient to compete with cash purchasers or buyers whose effective purchasing power is denominated in stronger currency. The result, over time, is a displacement of local ownership aspiration to less desirable areas or to a longer waiting period before purchase becomes possible.

Policy Responses Worth Considering

Several countries with significant diaspora populations have addressed the tension between overseas demand and local affordability through policy. Some have created preferential mortgage terms for first-time domestic buyers, effectively reserving certain financing advantages for the local market. Others have required that affordable housing components of new developments be offered first to local buyers before overseas purchasers can access them. Others still have focused simply on building more supply, on the reasonable argument that a larger housing stock reduces the displacement pressure from any particular category of buyer.

Jamaica does not need to treat diaspora investment as a problem. It is an asset. But a well-managed market recognises both the contribution of overseas buyers and the needs of local residents, and designs policy that serves both without sacrificing one for the other. The diaspora community built homes in Jamaica because they loved it and believed in it. So do the Jamaicans who are trying to do the same thing today on local wages.

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