2021 has arrived. And in certain respects, the uncertainty and tangle of 2020 continues. But there can be powerful wisdom that comes from even the most negative experiences.
Traditionally January is a time for reflection. A time to take stock, a time to look back, and dare I say, find gratitude for the past year. So that is what I did. First personally, and then professionally.
And while I will not bore you with the details of gratitude and self-reflection (we’ll need some slow-sipping rum & coconut water for that conversation!), I do want to share a professional review of Cayman’s 2020 real estate market and what it means for 2021.
Cayman Real Estate – A long year. A brief review.
Since 2003, I have reviewed the industry movements every quarter, like clockwork. I analyse market-wide transaction stats, list to sold prices, inter-market relations, external pressures, and even average days on the market.
So last week, I sat down and pulled the numbers. Starting with the last quarter of 2020, and then the entire year. And I have to say I am beyond impressed.
In March 2020, at the beginning of lockdown, we all braced for impact. And yet despite the numerous challenges the year brought us, this island nation proved its resilience. The Cayman real estate market speaks volumes. And after taking a brief look at the stats for yourself, you will see why my national pride is at an all-time high.
Recap of Q4 2020 - Cayman Islands Real Estate
Year-on-Year Review- Cayman Islands Real Estate
Cayman’s 2020 Real Estate Stats Summarized
Even though the number of sale transactions was down this year, the total sales value was up 15%.
- The overall number of transactions was down but,
- The average residential sales price was up 27%
- The average value of total residential sales was up 4%
- The number of high-end sales increasing by 90%
- Land sales value was up 1% yet the average price was up 12%
- Supply of listings to market is projected to decline through 2021
- Record sales prices throughout the various sectors:
- Highest homes sale in Cayman history was US$14M (in lockdown no less!)
- Highest home sale in Rum Point was US$7.15M (in lockdown no less!)
- Highest canal lot sales in Clipper Bay, CIYC, Crystal Harbour, Baccarat Quay, Diamond’s Edge and on...
- Highest condo sale prices at Pinnacle, Ritz-Carlton, RPC, Vela, Palm Springs, Windsor Village and on...
These bigger picture market statistics are a clear testament to the strength of Cayman. Locked down on a closed border island that traditionally relies on tourism, would have you thinking otherwise, but Cayman has maintained a healthy economy. Real estate is, after all a reflection of, and supported by the stability of our government, the structure of our financial sector, the social harmony, compounded by warm sunsets!
Confidence in the 2021 Cayman Market
What’s the big deal? 2020 is done and dusted. But this impressive level of activity and stability nourishes our confidence in the year's to come. It is the foundation of the real estate industry. So it comes as no surprise that we are receiving a record number of inquiries from local and international buyers. We all want to shelter in a safe environment. And the Cayman community weathered the storm of 2020 incredibly well, gaining global recognition for strength amid the pandemic.
Team Property Cayman in 2020 - Bucking the trend!
Let me share with you another one of my professional rituals; this one is weekly. At 10:00 am, every Monday morning, our team meets to review sales, listings, potential buyers, and new offers. We discuss challenges and market trends. It is the ideal way to start the week, allowing us to learn from one another, to support each other, and share the journey.
This past Monday our final 2020 stats were tallied. While the year-on-year market stats were stable for the industry as a whole, Property Cayman saw a 30% surge in the number of families we served and a 41% increase in property sales volume (the total value of properties sold).
One of the top-performing real estate agencies in Cayman
I am beyond proud to say that Property Cayman, the boutique firm that Stefan Prior and I formally launched in September 2019, is now one of the top-performing real estate agencies in the Cayman Islands. We await the formal results next week on just where we ranked.
We are a team of six agents supported by four incredible administrative staff and currently recruiting. We are small but mighty. We work really, and I mean really, hard – but we never look at it that way. We remain grateful to the community that nurtured our success and gave back over 295 community service hours (with plans to double that this next year).
So, after reading the 2020 recap, maybe now you won’t think I am completely bonkers when I say we found gratitude for 2020! It served to accelerate much-needed change for businesses and industries alike. It also reaffirmed a continued confidence in the Cayman real estate market.
2021 Cayman Real Estate Predications
Before I provide my real estate predictions for 2021, let me preface that the real estate market has a series of different sectors - each with varying brackets of price. To an extent, they ebb and flow in their own eco-systems and will react to the various market pressures in different ways. But they are also co-dependent on the other. So, when you ask how is the market doing? Know that it depends on a lot of things. (If you would like a tailored market analysis, then please feel free to reach out.)
New Year. New Home.
Believe it or not, people have real estate New Year’s resolutions. Empty nesters looking to downsize, growing families needing more space, and first-time buyers, all spring into action with the new year. Our team is noticing a significant uptick in traffic. We expect to see a continued flurry of activity throughout 2021.
The long-lasting effect of North American and European economic stimulus packages, the inevitable increase in taxation, as well as political turmoil and rolling lockdowns will continue to bolster the international demand for Cayman. We are a safe harbour, providing calm and stability amid a storm world.
The influx of high-net-worth individuals purchasing in Cayman will continue to decrease the supply of properties in the US$2.4M+ range (the magic number needed to qualify for permanent residency by independent means). What is already a hot commodity, will become even more so. In short, we project a shortage of inventory in the high-end residential market.
When it comes to the luxury real estate market, my colleagues and I are sharing similar stories. It is a challenge to secure feasible options for buyers, especially as we are working in an already small sector of a very small marketplace.
Seven Mile Beach has been looking for fresh inventory. And on that note, Property Cayman is proud to bring the new luxurious Lacovia’s redevelopment to the market place, and believe us when we say it is spectacular. The trend to redevelop older (80’s & 90’s) developments will continue for decades to come as it evolves to meet significant market demands. Lacovia only has 30% remaining and has yet to actually break ground!
A Seller’s Market
We are nearing an all-time low in inventory, not just in the high-end residential market, but across the board. On the whole, this drives pricing and values upwards. (Again, please keep in mind, that a large inland condo is different to a small beachfront condo. Just as a Rum Point homes is different to a preconstruction apartment in Grand Harbour. Each of these are mini markets with varying experiences.)
Low inventory, without a change in demand, means it’s a seller’s market. So if you were already thinking about it, perhaps it is time to cash in your chips and list your home. Whether it is time for you to sell and benefit from the current market demand will be determined by your personal property journey. But my advice is, and always will be, to only make a property move with a long-term mindset. This approach will protect the security of your tomorrow.
A Transitional Year
As vaccines take hold, we can anticipate more travel and further opening of borders. This will bring fresh economic winds to these shores. Population growth is economic growth, and whilst many sectors have survived or even ‘thrived’ in the 2020 market, it is not sustainable.
However, even with the vaccine rollout, 2021 will remain a transitional year. Tourism is not coming back quickly, so the return of seasonal workers will be gradual. Therefore, with a shortage of tenants, some landlords/investors may start to get antsy and begin negotiating further on their investment properties. In the more desirable locations, real estate under the CI$500,000 range will remain hard to come by. Whereas in other areas we may see an oversupply and therefore a new level of affordability for entry-level buyers. Not the worse news for first-time buyers looking to get into the market.
2021 Cayman Real Estate Take-aways
My final message to buyers, sellers, international investors, landlords, friends, and family is to play the long game. We all want a quick return on investment but be patient, realistic and be smart. Choose a growth mindset and harness the experience of the past. And most of all let’s enjoy and be grateful for a strong Cayman market. It is resilient. It is confident and all with valid reason.
Real estate is an investment for you and your family’s future. It is the choices you make today (that you can reflect on over a rum & coconut water), that you will be grateful for tomorrow.
Be kind & stay safe.
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