WILLEMSTAD – Foreign real estate investment has a measurable relationship with housing affordability in Curaçao, according to a new academic study that also finds widespread concern among residents that foreign buyers are pushing property prices higher.
The study, conducted by Kristelie A. Isenia as part of her Bachelor of Business Administration program at the Inter-Continental University of the Caribbean, examined how government intervention, household income and foreign real estate investment affect housing affordability on the island.
Researchers surveyed 100 Curaçao residents between the ages of 15 and 64 and analyzed the results using SPSS. The research included descriptive statistics, cross-tabulations, chi-square tests, t-tests, ANOVA and Pearson correlation analysis.
Among the three factors examined, foreign real estate investment was the only one to show a statistically significant correlation with housing affordability.
The correlation was relatively weak, at 0.243, but statistically significant with a p-value of 0.015. Government intervention and household income both showed correlations of 0.146 that were not statistically significant.
The author cautions that the results should not be interpreted as meaning foreign investment alone is responsible for Curaçao’s housing problems. Housing affordability is described as a multidimensional issue affected by supply shortages, access to financing, government policy, construction costs and other market conditions.
Nevertheless, the perceptions among those surveyed were striking.
Asked whether foreign buyers are increasing house prices in Curaçao, respondents produced an average score of 4.37 on a five-point scale. The proposition that regulating foreign property ownership could improve affordability scored 4.24, while the statement that foreign buyers are reducing local residents’ ability to purchase homes scored 4.09.
Respondents also acknowledged the other side of the issue. The statement that foreign real estate investment can contribute positively to Curaçao’s economy received an average score of 3.57.
The study therefore does not recommend simply shutting foreign investors out of Curaçao’s real estate market. Instead, it argues for finding a balance between the economic benefits of foreign capital and the need to keep housing accessible to residents.
The research also points to international examples. Vancouver and Toronto introduced foreign-buyer taxes in response to housing-market pressures, while South Korea adopted restrictions requiring government approval for certain property purchases and residency requirements aimed at discouraging speculation.
Curaçao currently does not impose strict limits on the number of properties that non-residents may purchase, according to the study. It notes that residents and non-residents are generally subject to the same property-related tax rates, while qualifying large investors may benefit from investment incentives.
The study concludes that foreign investment, household income and government intervention all play a role, but none can fully explain Curaçao’s affordability problem on its own.
Instead, it says the housing crisis should be treated as a system-wide issue requiring coordinated policies involving government, financial institutions and the private sector.