The Cayman Islands property market doesn’t appear to be getting any sicker, but it’s inconclusive whether it’s getting any healthier either, according to data covering the first four months of the year.
Lund’s take
In his recent “Real Estate Market Update”, RE/MAX Cayman Islands Broker/Owner Kim Lund said, “the Cayman Islands real estate market continues to struggle in 2012, after it appeared to bottom out in 2011.
“As of 15 May, the number of real estate sales for 2012 is 16 per cent lower than the same period in 2011. While this is not an encouraging sign for the first half of this year, it was not totally unexpected. For the Seven Mile Beach market, it is down less than the overall market and is lower by 6 per cent.
“There were indications that the first half of the year would be weaker than the second half, due to momentum from new development not having built up until the latter half of 2012. The statistics seem to be confirming this, although the jury is still out on whether we will get the real estate sales rebound, during the second half of the year and beyond.”
Mr. Lund grounded his analysis of the market in sales statistics from the Cayman Islands Real Estate Brokers Association, noting that since the market peaked in 2007, the number of sales dropped by 14 per cent, 6 per cent and 20 per cent in 2008, 2009 and 2010, respectively. Last year, sales increased by 6 per cent over the previous year.
During the past five years, prices have fallen due to weak demand, Mr. Lund said, saying that the price of a three-bedroom home has fallen by an average of 11.5 per cent and the price of a three-bedroom condominium has fallen 18 per cent since 2007. Other positive indicators for increased sales in the future include strong stay-over tourism numbers, Cayman Airways’ new routes to Panama City and Dallas, Texas, and new construction projects.
First quarter 2012
Statistics from the Lands and Survey Department, which track freehold transfers (mostly, but not all, sales) and generally lag a little behind CIREBA stats, paint a similar picture to what Mr. Lund describes.
Those numbers for the first quarter of 2012 are much improved over the dismal numbers posted in the previous quarter, i.e. the last three months of 2011.
The number of transfers (425) in the first quarter of 2012 increased by 12 per cent compared with the last quarter of 2011. The total value of transfers ($116.7 million) increased by 26 per cent, and the average value of transfers ($274,000) increased by 12 per cent, from quarter to quarter.
However, first quarter 2012 numbers were down significantly compared with first quarter 2011 stats, which were skewed heavily by the Dart Group’s January 2011 purchase of prime property from Georgia developer Stan Thomas, totalling more than $99 million. Compared with the previous year, the number of transfers in the first quarter of 2012 decreased by 12 per cent; the total value decreased by 54 per cent; and the average value decreased by 47 per cent.
First quarter 2012 numbers were also down compared with the average stats posted during the first quarters of the previous five years. Compared with the averages posted during the first three months of 2006-2011, the number of transfers in the first quarter of 2012 was down 17 per cent; the total value of transfers was down 12 per cent; but the average value of transfers was up 6 per cent.
Of the 25 quarterly periods on records, the first quarter of 2012 ranked 20th in terms of the number of transfers, 13th for total value of transfers and 7th for average value of transfers.
March, April 2012
According to Lands and Survey stats, there were 176 transfers worth $46.1 million in March 2012 and 117 transfers worth $26.7 million in April 2012.
The number of transfers in March 2012 increased by 22 per cent compared with March 2011, while the total value of transfers decreased by 37 per cent, as the average value of transfers decreased by 48 per cent.
The number of transfers in April 2012 increased by 9 per cent compared with April 2011, and the total value of transfers increased by 6 per cent, while the average value of transfers decreased by 3 per cent.
Through the first four months of 2012, there have been 542 freehold transfers worth $143.3 million, with an average value of $264,000. For the year-to-date, the number of transfers is down compared with each year since 2006. The number of transfers for the year-to-date 2012 is down 8 per cent compared to 2011, and is down 20 per cent compared with the average for the first four months of 2006-2011.
The total value of transfers for the year-to-date is down 48 per cent compared with 2011, and is down 15 per cent compared with the 2006-2011 average. However, the average value of transfers is up 5 per cent compared with the 2006-2011 average.
With data for 76 months on record, March 2012 ranked 30th for number of transfers, 20th for total value of transfers and 20th for average value of transfers. April 2012 ranked 69th, 61st and 38th, respectively.
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