Just 1,691 property sales took place last year – the lowest level since the Cayman Islands began computerising property transfer records in 1995.
The data, which comes from a private report, also reflected the third successive fall in the annual volume of transfers. The drop in 2008 was 5 per cent from the 1,786 transfers in 2007. The all-time high of 2,640 was recorded in 2005.
The total value of properties transferred last year was also on a losing streak.
In 2008, collective sales represented CI$489 million, down nearly 11 per cent from 2007 and nearly 25 per cent from 2006 – the highest year on record with transactions totalling CI$600 million.
The picture was no better last year in terms of the average price of property sold. It fell from CI$307,500 per transfer in 2007 to CI$289,400 in 2008, down more than 10 per cent, its second successive drop.
The calculations are based on statistics from the Cayman Islands Government’s Land Information System and represent a composite average of commercial, industrial and residential transactions less those for nil value.
They are contained in the Cayman Property Review, a report published this week Charterland, a private property consultancy firm.
Its publication on April 1 coincided with the introduction of a six-month stamp-duty cut designed to kick-start Cayman’s flagging real-estate market.
That, coupled with an impending commission cut from the firms in the Cayman Islands Real Estate Brokers Association, may be just what the market needs, said Simon Watson, one of Charterland’s three directors and author of the report.
‘It’s clear from the first two months of 2009 that there’s going to be a continuing decline in volume as well as total and average values,’ he said.
His projection is borne out by figures from the Lands & Survey Department for January and February.
Transfers of freeholds – Government figures differ in that they include non-monetary transactions – dropped 17 per cent from 356 for the first two months of 2008 to 292 for the same period this year.
Collective freehold sales values took more of a pounding at the beginning of the year dropping 43 per cent from CI$97.4 million to CI$55.5 million for January and February 2008 compared with those months in 2009.
Asked whether the market had seen the worst, the department’s Senior Valuations Officer Uche Obi said: ‘I wouldn’t think so. If anything, transfers and prices are continuing to drop. That’s why we needed the stamp-duty cut.’
Given the usual lengthy purchasing process, trends can take some time to surface.
‘There’s also the time lag between offers made and deals closed,’ said Mr. Watson, ‘which means the figures probably don’t reflect the full extent of the slowdown yet.’
Early figures for this year suggest that, with 133 monetary transfers in January and 159 in February, for-value transfers are in-line with recent years. However, the total value of sales for the first two months – CI$23.7 million and CI$31.8 million respectively – is lower than expected, the report’s author commented.
Meanwhile, Lands & Survey figures for March should be posted early next week after which the department plans some analysis.
‘We… have the raw data just now,’ said Mr. Obi. ‘I haven’t looked at the figures yet and we haven’t had a chance to review them, but we’ll be forwarding them to central government shortly.’
Another trend, exposed by Charterland’s analysis, is the rise in the number of transfers that are being reassessed by the valuations office.
Now, one-in-four of transfers is being reviewed, up 64 per cent from 2007. This reflects a sea change from the first years after introduction of computerised records in 1995. From then until 2002, reassessments averaged 5 per cent per year.