The Cayman Islands have seen important changes to its political leadership in recent days, with the ousting of former Premier McKeeva Bush and the instalment of new Premier Juliana O’Connor-Connolly.
Bush was removed following a vote of no confidence after his arrest with regard to a corruption investigation, including the misuse of a credit card. I believe that this is the right course of action for the Cayman Islands. When someone is in such a high position of office it is essential that they are not perceived as “above the law”. T
he ousting will be viewed as a good thing in time as it shows Cayman is ensuring it is keeping its own house in order.
Stamp duty rises
With the exception of first-time Caymanian buyers, all other buyers of property in the Cayman Islands – local or from overseas – will now have to pay a flat rate of 7.5 per cent stamp duty. That is an increase of 3.5 percentage points for Caymanians and 1.5 percentage points for non-Caymanians.
In my view, this will perhaps make it a little harder for buyers to justify their purchase; however, those taking a long-term view of their investment will be able to spread the cost over the extended period of their investment.
Foreign nationals will obviously be impacted to a lesser extent than locals and I believe that the increase will only really be felt at the higher end of the market.
That said, 2013 is already showing heightened activity, particularly at the high end.
We start the new year with a large number of properties that are pending closing – 145 (as per Cayman Islands Real Estate Brokers Association statistics) as of 24 December.
This figure is a marked increase of 42.16 per cent over the same time last year, when there were 102 properties pending. The statistics are also revealing that prices are increasing, particularly in the higher end of the market, where we are seeing signs of significant movement as we move into the busy season.
As of 24 December, 2011, the average cost of a condo on CIREBA’s books was $808,497. By the same time period this year, that figure had increased by 4.79 per cent to $847,204.
Analysing these figures further, the lower end of the market (one bed condos) has seen a drop in price. At the end of 2011, the average price was $245,411, with that figure dropping by 3.56 per cent to $236,972 at the end of 2012.
However, when you look at the higher end of the scale you will note a marked increase in price, with four bed-plus condos averaging out at $2,796,946 as at the end of this year, compared to $1,877,143 last year, an increase of 49 per cent. Four bed-plus residential properties have also seen signs of price increases, from $2,160,125 in 2011 to $2,287,024 in 2012, an increase of 5.87 per cent.