CIREBA: Real Estate Market Update – May 2012

Data for property transactions for March and April of 2012, as indicated in the above charts, show steady business in Cayman’s real estate market so far this year, continuing the trend established at the end of 2011 and the first two months of 2012.

Figures are slightly down from overall 2011 averages, even when accounting for the unusually high figures from February of 2011. However activity for early 2012 is still significantly higher than the same period in 2010.

2012 – Early Months

The exceptionally high sales figures for February 2011 provided impressive overall numbers for last year, but can be misleading for interpreting 2012 figures. February 2011 sales were 316 per cent higher than the monthly average for the rest of the year.

Year-to-date numbers for 2012 show no sharp drop-offs or spikes in property transactions. So far in 2012, there has been $143.3 million in transfers, representing a 48 per cent decrease from the same period in 2011 and a 44.9 per cent increase over the same period on 2010.

The number of property transactions for January through April is down 8 per cent compared to the same period last year. More telling is that the average transaction price for 2012 so far is $264,463, again a drop from the same period in 2011 ($395,797) but a marked increase over 2010 ($184,084).

While the figures for January through April may be disappointing after the big growth jump in 2011, the figures are still an improvement over 2008-2010.

Commercial and residential developments

With the exception of The Watercolours residences, commercial development still leads the construction market. The first phase of construction of the ForCayman development, the remodelling and extension of the Esterley Tibbetts Highway, is now well under way.

And remodelling has begun on the old Courtyard Marriott, which will be the centrepiece of the West Bay redevelopment. Financing news continues to be issued for the Shetty Hospital. And Cayman Enterprise City continues to make the news with reports of international alliances that will give this special economic zone a broad base. Additionally, several other smaller retail and business developments have already been completed or are under construction.

Construction is continuing apace at The Watercolours, Seven Mile Beach’s newest and most elegant villa development. Sales are taking place, though the figures will not be reflected in property sales data until 2013.

Reports on the redevelopment of the cruise ship harbour have been conflicting from the start. It appears that this enormous project will eventually go ahead, though it is unclear when construction will start or how long it will take. Redevelopment of the cruise facilities, when it does happen, will increase retail opportunities and will put a more modern face on Cayman’s tourism industry. All of this will benefit the Cayman economy in numerous ways.

Although 2012 business to date is down from the same period in 2011, it is significantly higher than 2010 and 2009. The rebuild of the real estate market after the 2008 recession will have ups and downs.

Given the other positive factors in the Cayman economy (better tourism figures, possible further refinements of the immigration system, and a slightly improving employment market), it is reasonable to expect that 2012 may also prove to be a growth year.

For more information
Jeanette Totten
President
Cayman Islands Real Estate Brokers Association
E:    [email protected]

 

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