The Caribbean is a diverse region and home to 30 territories that include sovereign states, overseas departments and dependencies. The region’s real estate markets are just as varied, but the prime markets are dominated by second home buyers from overseas.
Some of the world’s most exclusive residential markets can be found in the Caribbean. Saint Barthélemy, or St Barts has long been a playground of the rich and famous, while the Barbados Platinum Coast has a global reputation among the ultra wealthy. For the ultimate trophy asset, the Caribbean also offers private islands. Richard Branson’s Necker Island is one of the most famous.
Tourism is all-important to the Caribbean economy and the region is a popular overwintering destination for the northern hemisphere. As a consequence, the prime residential markets of the Caribbean are closely tied to the success of North American and European economies. Residential values fell by up to 30% across the Caribbean during the North Atlantic debt crisis, but recent years have seen a return of buyer interest in the Caribbean’s second home markets.
This has been largely due to the turnaround in the US economy and a more positive outlook from American buyers as a result, coupled with the return of some UK and European buyers. Prices in the Caribbean seem now to have bottomed out and transactions are beginning to pick up.
While tourism is important, some island markets benefit from more diversified economies. In both the Cayman Islands and British Virgin Islands more than half of GDP is generated by the financial services sector and they are both ranked in the top 40 financial centres globally. This brings with it high paid jobs and residents relocating for business and employment thus supporting a prime residential market for long-term residents.
Some Caribbean islands are more reliant on mass tourism than others. Figure 28 shows that none of the islands we look at in more detail here fall into the mass tourism category, even though overseas buyers are important in their prime property markets. Tourism comprises 36.2% of the economy in Barbados, 26.2% in the Cayman Islands, and 24.5% in St Kitts and Nevis, according to the World Travel and Tourism Council.