The Cayman Islands real estate market in Q3 2024
- Sales increased despite fewer listings: Sales rose by 4% year-on-year, even with a 16% drop in new listings and a 17% decline in value sold. This suggests strong buyer demand, leading to a higher conversion of available properties into sales.
- Homes sold faster: Residential days to sell dropped by 24% compared to Q3 2023, with properties moving quicker in 2024. This may reflect increased buyer urgency, better pricing strategies, or more motivated sellers.
- July’s low average sale value: In July 2024, the average sale value fell below one million for the first time all year, contributing to the overall decline in Q3. The average rebounded in August and September, but July’s dip in high-value sales had a significant impact on the quarter’s overall performance.
(Source: CIREBA)
Market Performance Compared to Previous Years
This quarter has been typical for the time of year. Due to a new trend of families taking longer vacations and also because it’s a US election year (I will touch on how this affects our market later on), there was a sense of quietness.
And while the market slowed down during the summer as expected, it wasn’t as quiet as last summer! This is a good sign. High-end sales, like those in the newly completed AQUA project, and a record sale at the Ritz-Carlton have notably influenced the market and its confidence. The tide is turning!
Local Influences on the Market
Locally, issues like further beach erosion at the southern end of Seven Mile Beach, ongoing labour and construction costs, and traffic concerns continue to influence the real estate market. However, it’s Cayman’s election year (May 2025) so fine tuning of leadership may come into effect and also lest we forget the infrastructure improvements, such as the upgrades and expansion of the Linford Pierson Highway. For example, Grand Harbour and Red Bay, are now more attractive because of a significant reduction in commute times and they are yet to even complete the upgrades.
Interest Rate Cuts and Market Reaction
The recent interest rate reduction by the CIMA (Cayman Islands Monetary Authority) on September 19th has already sparked an increase in enquiries, particularly among the mid-to-entry-level space. As financing becomes more affordable, it’s expected that demand in these sectors will only rise. The high-end market, however, may be less affected by interest rates since buyers in this segment typically don’t rely on financing. That said, confidence in the broader economy will boost activity in this segment as well.
Global Influences and Cayman’s Appeal
While international conflicts, Russia/Ukraine and the Middle East, create human sadness and insecurity across the global economy, they further solidify Cayman’s appeal as a stable and secure destination. Many buyers now prioritize safety and security when choosing a place to invest, and Cayman remains a top choice due to its reputation as a “safe harbour in a stormy world.”
The Influence of the US Election on Cayman Real Estate
Historically, US election years have created uncertainty, leading to a lull in real estate activity. The outcome of the election can significantly impact the confidence of US buyers, with some choosing to relocate to Cayman depending on the future political climate. In past elections, Cayman has welcomed both Republicans and Democrats seeking a change, and this year could see similar trends, especially with ongoing global instability. When the Presidential race is so tight, it casts doubt, which often leads to a (temporary) pause in activity. 80% of our buyers are foreigners and the lion share are North American, so there a large percentage in a ‘wait and see’ approach until the outcome is clear. Once the election is over (and confidence resumes), activity tends to pick up again. This is beautifully aligned with Cayman’s high season compounded by a softening of interest rates. Entry-level properties tend to be less affected by this pre-election uncertainty, but the market will undoubtedly see some spillover effects as wealthy US investors look to relocate and invest.
The Impact of Recent Residential Developments
Projects like AQUA and soon-to-be-completed developments such as Watermark have influenced the market significantly. These luxury developments raise the bar for real estate in Cayman, reflecting the demand for premium quality and exclusive lifestyles. These sales establish new benchmarks for the market and influence pricing for future projects. Upcoming projects, including the redevelopment of Aqua Bay Club (currently in the planning process) and the ongoing construction of Lacovia, Grove Too, Kailani, WAVES, and The Grand Hyatt, as well as other developments such as The Watermark, The Sands, Point West nearing completion, all support this continued trend.
New Developments and Future Supply
While new high-end developments like Watermark and Lacovia are raising the bar and making waves in the market, the overall low supply of properties continues to create challenges. Developers may not be rushing to bring new properties to market due to the high costs of construction and the slowing confidence these last 6 months. This uncertainty in particular sectors is soon to be a thing of the past. We project an increase in demand, and further confidence will build momentum through 2025. A. L. Thompson’s recently approved affordable housing subdivision is a sure sign of demand, and we look forward to seeing how this services entry-level property owners. Pricing? We anticipate pricing to hold firm if not going up. Shiver the thought, right?! Those who make moves in the market before the high season can expect to see their investments increase in value. The current ‘wait and see’ mindset presents an opportunity for you. Think long term and use time to your advantage because real estate is a long-term investment.
Cayman’s Unique Appeal in Tough Times
Despite these external pressures and global challenges, Cayman continues to stand out as a particularly attractive destination for Ultra High Net Worth (UHNW) individuals and the service providers that benefit from them, too. The recent record-breaking sale at The Ritz-Carlton speaks to this trend. What sets Cayman apart is its balance of safety, security, top-tier healthcare, world-class dining, and a healthy lifestyle, all within a tax-free environment. This, along with the unique warmth of “Cayman Kind,” ensures that the Cayman Islands remain a sought-after destination for those seeking refuge in an increasingly uncertain world.
(Please note that this is a broad analysis of the overall market. Please reach out for a bespoke detailed report tailored to your personal property journey).
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