Home, sweet home

Local and foreign buyers, high- and low-income demand, young people looking for their first homes and retirees looking for solid investments — Richard Costas analyses the complex and fragmented Caribbean real estate market

  • Artist’s impression of HCL’s One Woodbrook Place residential development. Photograph courtesy Home Construction Ltd

Like so many sectors in the Caribbean, the market for land and property, by its very nature, is fragmented. While the market in one island may be buoyant, it may be less so in another; while one country may be expecting growth in double figures, another may be lucky if it manages to stand still.

However, what is true of almost the whole Caribbean is that there are three main types of buyer: local buyers, returning nationals (citizens who have lived abroad for many years and are now returning to their homeland, usually to retire), and overseas buyers. It is the third group, the overseas buyers, who really influence the property market and prices in most islands. Overseas buyers are mostly offshore business companies or regular visitors to the island in question; the latter are usually the most important.


“Tourism drives the real estate market. The more people that come to the Caribbean on holiday, the more will eventually consider buying a property here,” says Clarence Hiles of Caribbean Mortgage Services, a Barbados-based company that operates across a number of islands in the Eastern Caribbean, including Grenada, St Kitts and Nevis, St Lucia, Trinidad and Tobago, and Barbados itself.

Traditionally, overseas buyers were wealthy individuals who wanted to combine the tropical lifestyle afforded by a luxurious second or third home in the Caribbean with a sound investment. This group is still extremely influential in islands like Barbados, which has a highly developed property market, where many different types of property are available, and where the real estate and construction sectors have been proactive in building developments that will attract overseas buyers. Golf courses and polo fields are important components of some developments, while retirement homes and healthcare facilities have been the focus of others.

Trinidad and Tobago, the eastern Caribbean’s most important economic power, is also developing a number of new and attractive real estate projects, such as the Millennium Vision project, which is almost a mini-city in its own right, with its own schools and businesses, as well as private housing. Michael Fifi, the chief executive officer and managing director of the HCL Group of Companies, the conglomerate behind the Millennium Vision project, says: “At the moment the market [in Trinidad and Tobago] is very buoyant, with a healthy demand chasing availability at all levels . . . There are great opportunities for local and foreign investors at the level of individual home ownership and as developers.”


He says the local buyer is the most important driver of the market in Trinidad and Tobago. “The bulk of local housing is geared towards the local market; price increases are due to the local demand and vibrancy of the market. We have also found that our product is very attractive to the foreign-based Trinidadian who wants to buy locally. In Tobago, there is a slight difference, and here Tobago Plantations, an affiliate of HCL, has attracted foreigners, and appeals to the resort buyer. The Millennium Vision Project also has ‘integrated resort development status’, which means that it is inclusive of golf, recreational, and shopping facilities, as well as residential homes. The standards are high and prices are still well below the rest of the Caribbean.”

According to Clarence Hiles, St Lucia is attracting more attention, with a number of major real estate projects at various stages of development, and there is growing activity in the much smaller islands of St Kitts and Nevis. Both territories are likely to grow in importance to property investors in the future. But activity has slowed in Grenada, Jamaica, and the Cayman Islands, all three of which were paid a destructive visit by Hurricane Ivan last year.

Although traditional wealthy buyers are still of great importance, the idea of owning a home in the region is now attracting people who, while not in the super-wealthy category, do have sufficient funds and the desire to buy a property outside their own country. Overseas owners often spend a part of the year in the Caribbean and, when they are not in occupation themselves, rent their property to tourists — usually on a short-term basis. This makes property ownership doubly attractive, providing a source of regular income as well as being a long-term investment.

Most overseas property buyers are from the UK and Europe, with US buyers less active in most islands. UK buyers have always been prominent property investors in the Caribbean, especially on those islands that were once British colonies. This trend has strengthened during the past few years. The British are now looking beyond France and Spain, once the most-favoured destinations for British tourists and property buyers (another indication of the connection between the two sectors). The “average” investor in overseas property is showing more and more interest in the Caribbean, and the strength of the British pound is making investment increasingly feasible.

The Caribbean’s economies (and some of its currencies) are very closely linked with the USA, but European buyers are growing in importance because of the strength of the euro against the US dollar. The increase in interest from UK and European buyers will probably continue as long as the US currency is in decline.


The “returning nationals” market varies in importance from country to country. The countries welcoming the most returnees are those that saw the largest migration of people, especially during the 1950s and 1960s, and which are relatively stable and prosperous. Countries like Guyana, which have seen and continue to see large numbers of people leaving to make a living elsewhere, but which have been so cruelly afflicted by natural disaster and economic difficulties, welcome fewer returning nationals, so their effect on the market is much smaller.

Regardless of which island is their home, Caribbean people who have made their lives in their own country are keen to become homeowners. The number who are able to do so is growing, especially in those islands that have experienced several years of economic growth. The Caribbean has a developing and increasingly affluent middle class; living standards and expectations are rising. At the same time, changes in the local financial services sector (made up of the banks and insurance companies that provide most Caribbean mortgages) have resulted in the introduction of many new lending and mortgage products.

For local people, the greatest hurdle to home ownership is price. Most prime sites, especially those on or very close to beaches, are the preserve of upmarket properties and developments aimed at overseas buyers or very wealthy local people. The high prices that land and property in these locations command has fuelled a rise in the general level of property prices. In some islands, such as Barbados, rising property and land prices have made buying a home so difficult for most people — and such a political issue — that the country’s government has been forced to introduce a subsidised housing scheme whose aim is to provide affordable housing for those in the lower-and middle-income brackets.

In Trinidad and Tobago, Michael Fifi of HCL says: “Prices have escalated due to increased land and construction costs beyond the affordability of the normal man in the street. There has been a steady increase in prices . . . steadily putting housing out of the reach of the lower- and middle-income market. This has led to government intervention and a very vibrant government housing programme, which has also benefited private construction partners that work with government, because these developments are heavily subsidised by government.”

The market for properties for local people is bound to grow in importance as the living standards of Caribbean people rise. Consequently, the construction and real estate sectors will have to pay more attention to the needs of ordinary people if their businesses are to benefit from the trend. That will include the needs of those on low and middle incomes.

Clarence Hiles says that, just as mortgage lenders have been forced to introduce new products to take advantage of changing market conditions, so property developers and building companies will have to find ways of providing affordable housing for those on low or middle incomes. Hiles’s mortgage brokerage has already been involved in such a scheme, in which the developer, builder, lender, lawyer, and all those involved in the process, worked together to provide affordable homes. “It can be done,” he says, “but you have to think innovatively.”

Funding provided by the 11th EDF Regional Private Sector Development Programme Direct Support Grants Programme.
The views expressed on this website are those of the the authors and do not reflect those of the Direct Support Grants Programme.