I estimate that there have been approximately 60 to 70 new properties built over the past year, or are committed to being built in the next year that are single dwelling, family residences in the US$1.5 million to just under US$3 million price range. These properties have been developed primarily in canal-front locations, from West Bay, along the Seven Mile Beach corridor and out to Grand Harbour.
Clearly there is an appetite for such homes right now, but I wanted to show that if you are looking for a high-end family home, there are a good many on the market right now. I therefore thought it would be useful to break down in detail these types of homes that are currently on the market and compare those statistics with similar properties which have been sold in the past two-and-a-half years, to give an indication of any changes in the market.
In looking at the figures, I decided to concentrate purely on residential homes, not those predominantly used for vacation, so I could better gauge the local market. I also decided to look at sales figures from the past two-and-a-half years to truly appreciate where the market has been in recent times versus what is currently available. The following numbers do not include the two properties that are under contract at this time and have not closed.
One sold each month
According to CIREBA (Cayman Islands Real Estate Brokers Association) statistics, there were 33 homes in the US$1.5 million to US$3 million price range that met my criteria of being residential rather than vacation properties which were sold from January 2013 to the end of June 2015. Out of this number, 24 were canal-front or canal-view properties, two were waterfront or water-view, six were beachfront or beach-view, and there was one other, meaning there has been roughly a sale a month of such homes over the past two-and-a-half years.
Looking at the numbers
Looking at the statistics for what is currently available (as of June 30), there are 42 residential (excluding vacation) properties in the same price range which are currently listed with CIREBA, 23 of which are canal-front/view, five are waterfront or view, five are beachfront or view and there are nine others. This is interesting because I can identify a direct correlation between the number of canal-front/view properties that have been sold in recent years to those which are currently for sale (24 and 23, respectively), along with a similar correlation for beachfront/view properties (six and five, respectively).
It also shows that there are currently nine houses in the “other” sector that may be inland or possibly with no access to the waterfront, factors which make these properties more sensitive to the market pricing and therefore more difficult to sell.
Further analysis of sales prices of homes that have sold over the past two-and-a-half years also makes for interesting reading. Of the beachfront/view homes that sold, sellers had to drop their prices on average 26.64 percent in order to achieve a sale.
Waterfront/view sellers had to drop their price an average 12.79 percent. Of note in the waterfront/view sector, one seller actually received a small increase from what they had originally listed the property for and what it finally sold for (3.45 percent).
Canal-front/view owners had to reduce the price of their home by an average of 15.74 percent. These statistics show that sellers must price their homes more realistically, or if not, be prepared to reduce their prices to a realistic level if they are to sell their properties.
In addition, it has been interesting to break down each sector and look at the number of days each home was on the market before it sold.
The canal-front properties took an average of 382 days, or just over a year, to sell, with the most days being 960 and the shortest being no days at all.
Out of the beachfront/view properties, they took an average of 372 days to sell, with one taking 830 days and one just 65 days to sell. Water-view/front properties took an average of 315 days to sell, and the one inland property took 127 days to sell.
These statistics show that sellers must price their properties correctly if they want to ensure a speedy sale.
If we continue to list properties at unrealistic prices, they will continue to sit, or vendors will have to be prepared to massively reduce their listing prices or negotiate at the table to get their property sold. On a positive note, I feel that moving forward, these properties will become more attractive to purchasers as there are fewer and fewer parcels to develop, and with the costs of building continuing to escalate, let alone the time it takes, it will only enhance the option for buyers to look more closely at existing homes.