Tag: Cayman housing market

A Testament to Cayman’s Strength

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%.

  1. The overall number of transactions was down but,
  2. The average residential sales price was up 27%
  3. The average value of total residential sales was up 4%
  4. The number of high-end sales increasing by 90%
  5. Land sales value was up 1% yet the average price was up 12%
  6. Supply of listings to market is projected to decline through 2021
  7. 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 are overarching stats, please let me know if you would like us to delve further into any particular analysis of your specific property performance.

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.

International Investors

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.

How to choose a real estate agent?

Let’s call it how it is. Real estate agents don’t have the best of reputations.  We get it.

Unfortunately, like any profession, a few bad apples can ruin it for the bunch.

Such a big life decision, buying or selling your home, deserves to be met with professionalism and integrity.

We care about you, and because we care we’ve compiled a quick checklist to ensure that you get the best possible representation, wherever you are on your property journey.

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Your Realtor Checklist

Whether you are a first-time buyer or an experienced investor, your Cayman realtor should have:

1.      Real Estate Expertise

The property market, particularly right now, is fast-moving. To effectively meet your real estate needs, you need an agent:

  • well versed in the local Cayman property market
  • who understands the financial requirements for purchasing a property in Cayman
  • knows the Cayman stamp duty tax rules and exemptions
  • able to interpret strata regulations and bylaws
  • who is comfortable overseeing the complete property transaction (including contracts, due diligence screening, market analysis reports, disclosures, and other legal documents – effectively managing any roadblocks to ensure a seamless experience for you)
  • who cares about you! Above anything else, choose an agent that has your best intentions at heart.
2.      Objective Real Estate Information

Your agent should easily be able to provide accurate and up to date information on re-locations, utilities, the rental market, zoning, schools, and more. They have objective stats about each property, data that should be shared with you so you can decide how to move forward with listing your home or placing a purchase offer.

3.      CIREBA Qualifications

Real estate laws, regulations, and processes are intricate. You want a realtor who knows the ethical and legal requirements of buying and selling property inside and out. All members of the Cayman Islands Real Estate Brokers Association (CIREBA) must complete specific training and testing to demonstrate their understanding of real estate law, contract law, and their duties as an agent. CIREBA also has a strict code of ethics that all members must adhere to. So by selecting an agent who is CIREBA member, you can rest easy knowing you have a qualified professional in your corner.

4.      Trusted and Candid Real Estate Advice

Life can throw us some unexpected curveballs. It is essential that during these times, you have a trusted and experienced professional that you can lean on. Someone who will tell you exactly how it is and the best way for you to navigate your way out the storm.

“We were about to close on a Seven Mile Beach condo, and then COVID struck. Our household income, like many others, took a hit. And like the rest of the world, we felt uncertain about the economy and the property market. So to say we were stressed about our pending property purchase, was an understatement. I reached out to Jude for advice. We discussed the situation, weighing all the possible scenarios, and ultimately ended up pulling our offer. The feeling of relief was instantaneous. It was the right decision for us, and we can’t thank Jude enough for her honest advice. She put our happiness and security above everything.” – Dr Derek Spence, Property Cayman Client

5.      Real Estate Negotiations Skills

In the property business, there are many elements, unique to each sale, that are up for discussion. You deserve to feel well informed and confident throughout the negotiation process. An experienced realtor should provide helpful insights and knowledgeable advice. They should safeguard your needs throughout the entire property journey.  With the right agent, there should be zero doubt that they have your best interest at heart. Remember, the highest offer isn’t always the best offer.

6.      Professional Networks

Property transactions are complex. There are a lot of cooks in the kitchen – buyers, sellers, agents, attorneys, inspectors, lenders, and often financial or investment advisors. An established, well-connected agent can provide their customers and clients access to an instant network of qualified and trustworthy professionals.

7.      Real Estate Marketing

Believe it or not, houses do not sell themselves. Your real estate agent’s marketing strategy is absolutely critical. How your property is listed and promoted will directly influence the number of buyers walking through your door, and the quality of the offers you receive.

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In a nutshell, a good agent can efficiently manage all the intricacies of the real estate transaction process, protecting their client’s interests and minimizing their hassle.

It is about the client, not the sale.

The business of real estate is about relationships.

We provide candid advice, helping clients avoid costly pitfalls, allowing them to minimize the headaches of selling while maximizing their profits.

Thinking about buying or selling? We’d love to chat.

The Market Moves In Mysterious Ways

A completely reasonable and fair assumption dictates that during an unusually slow summer season, closed borders, zero tourists, and a reduced population count all resulting from a world pandemic we should expect ZERO sales right!? Well, when a market moves against all expectations it’s worth looking a little closer.

We have reviewed the Association movements between June and July 2020 (the new dawn) how it differed from July last year (the old world) and finally we also reviewed what we are seeing in August so far and what the latter part of the year will look like.

 

June 2020 Vs July 2020

40% up in Condo sales
150% up in House sales
25% down Land sales – but watch out got lots of August activity.
No change in commercial sales

 

July 2019 (old world) Vs July 2020 (the new dawn)

52% down in Condo sales
44% down in House sales
65% down in Land sales
66% down in Commercial sales


Property Cayman had 9 transaction sides in July 2019 Vs  4 in July 2020 – 44% decline. However that’s 4 more than we were expecting.


Observation:
This decrease is expected however it isn’t what you could have expected with a pandemic underway. Also note it’s only a temporary shift. Despite internal and external pressures, transactions and demand are still very clear and present. This level of activity is returning with gusto which is a direct testament to local confidence. Many are seeing the opportunity to lock in (with the help of pension withdrawals in many cases) a new home or long term investment before the borders open and population with demand increases again.

With a steady incline of new listings, new contracts and a decline of the Back on Market listings, the August/Sept/Oct pipelines are filling up nicely. 

Source: CIREBA

August 2019 (old world) Vs August 2020 (new dawn)

24 Condo sales last August and 8 sales so far this August10 House sales last August and 1 sale so far this August32 Land sales last August and 3 sales so far this August0 Commercial sales last August and none this August… so far


Property Cayman had 10 transaction sides in August 2019 Vs 14 lined up to close this August 2020 (pipeline contracts) – 40% up and we have 3 weeks to go! Watch this space.


Observation:
Another summer season with record number of transactions? Despite a reduced July (year on year) there’s a surge of activity to rebuild the pre-covid momentum. It says a lot. Local demand and confidence is holding its ground and we can expect some good catch up this month.

August and beyond

With borders closed and pension withdrawals slowing down in the latter months of the year we can expect to see a decline in properties going to contract and a consequential increase in inventory (lowered demand with increased supply). We feel however that things won’t slow down and that when borders open up we can safely forecast new and positive influences on the market.

With open borders the market will quickly absorb any oversupply of inventory. With extended border closure into November we can expect pricing pressures to take effect but in reality it will be more of a stabilizing effect than a significant decrease in pricing.

Either way, whilst numbers are averaged down by 50%, most sectors of the market won’t see any significant decreases in pricing as seller’s continue to be patient. Markets ebb and flow over time so be sure to establish your big-picture property plan and consider the different chapters of YOUR journey. If you wait for a market to change to your advantage you will miss out on the opportunities currently in front of you.

This analysis is broad and general and more designed to spark the conversation. We would be delighted, as always, to assist you along your personalized property journey so feel free to reach out and let us know your thoughts, ideas and even concerns. We can cut through the noise and give confidence to your next move which every direction that might take you.

NB: ref: CIREBA stats

Why People are Seeking Sun, Sea & Safety in the Cayman Islands

All it takes is one visit to the Cayman Islands to fall in love. Of course our sandy white beaches, crystal blue waters and Cayman-kind smiles take a lot of the credit, but a few more critical factors make it a place that have people coming back time and time again. Especially now!

With the inevitable increases in taxes in the, U.K., U.S and Canada, and with “working from home”, now a realistic option more than ever as, it’s no wonder we are seeing an influx of family offices and high net worth families looking to move here. There was a trend pre-COVID from Canada and whilst this is continuing the inquiries are now coming in from the US, UK, Spain and France. C’est jolie ici.

Cayman is a tax-neutral, British Overseas Territory. We are a safe and sophisticated island, with excellent infrastructure and a high standard of living. Its ease of access to and from multiple major cities, including New York, Toronto and London make it easy for many to catch direct flights back home or to attend business meetings near and far. Sure you can meet on Zoom, but the work-life balance movement is real.

We have top rated international schools, excellent medical care, first world amenities, low crime rate, a top-class and fantastic culinary scene, and of course the endless recreational activities including golf, fishing, and all the water sports you can imagine, all right in your backyard. 

Buying real estate is a simple and straightforward process in Cayman. With no restrictions on foreign ownership, nor any property taxes, the prospect of owning a second home become feasible for many.

International buyers generally start out investing in a vacation condo/rental property, however given the direct impact of COVID on the world economy, we have noticed a (not so surprising) trend over the last few months with international buyers reflecting on their quality of life. So the shift begins; making the permanent move to enjoy life in a healthy and safe environment.  Why wouldn’t you invest in that?

New and/or existing buyers are either:

a) moving into their vacation home, with the intent on staying for longer and longer stints OR,
b) buying a primary residence with the direct intent on becoming a ‘Permanent Resident’ in the Cayman Islands, declaring non-residency in their home country, without impacting their current citizenship.

Owning real estate is by law a direct means to gaining Permanent Residency, so the concept of “living where you vacation” is being realized by many, now more than ever!

In conclusion:  We feel this is a trend we are going to see more and more of; COVID has highlighted new opportunities where ‘lifestyle migration’ is building momentum. Don’t forget there’s a reason why we live here. Ever thought of asking us why?