Our look at the high end real estate market in Cayman in this edition shows how the financial crisis has not only impacted globally, but also affected the ultra wealthy.
Investors worldwide have taken stock of their portfolios, disposed of assets they no longer require and reassessed what to do with their money. It has been suggested that because of the crisis currently wealth and opulence cannot be displayed as openly as in the past.
This is something that should count in Cayman’s favour, a place that has become a home to the wealthy for the past three decades, but still managed to maintain a certain level of understatement.
There are no fleets of Rolls Royce rolling down the Easterly Tibbetts Highway, no private beaches and no heavily gated communities that separate the super rich from the common people. Even if the high end real estate market should take off, this is not likely to change.
Realtors on the island are tirelessly emphasising the value that high end properties in Cayman represent. It appears Cayman is able to offer something that other Caribbean locations cannot: a combination of privacy, safety and functioning infrastructure from restaurants and bars to direct flight connections to the UK and the US.
But, after the price correction of the past two to three years, the market is still waiting to take off.
As in the past, new buyers may come from the US or the UK should the economy recover, but they may also come from regions Cayman is less familiar with: Russia, India and China. Over the next years China and India are likely to remain the fastest growing regions for high net worth individuals with investable assets of $1 million or more, a wealth report by CapGemini recently noted.
This echoes presentations at the Caribbean Tourism Organisation Leadership Strategy Conference in Barbados three weeks ago that the Caribbean travel sector has the opportunity to bring in ultra-high earners from China.
It certainly would make for an interesting development, because essentially a large part of the high end real estate market is the high end segment of Cayman’s tourism industry.
It could take some years for such a trend to take hold, diversifying these segments of Cayman’s economy away from the reliance on the US market would be a good thing.