Regular readers of my monthly updates will know that we like to periodically take an overview of the statistics produced by CIREBA, the Cayman Islands Real Estate Brokers Association, the entity charged with overseeing Cayman’s real estate industry. These statistics, especially when viewed within a historical context, always make for interesting reading and point to current market trends.
For comparison purposes I decided to look at the end of year figures for 2014, 2015 and the year-to-date figures (at Aug. 9 at the time of writing) for 2016. According to CIREBA statistics, in 2014 there were 625 listings that were sold during the year at a value of $423 million, or an average value of $676,800 per listing. Now compare that with 2015, when there were 689 listings sold at a value of $433 million, or $628,447 per listing on average.
The 2014 figures are strong because of sales of the WaterColours residences on Seven Mile Beach, which went through in that year and which strengthened considerably the overall value of properties sold. This is further reinforced when you look at the number of pending items at the end of 2014 (567) versus the much lower 368 for the end of 2015. This year is currently seeing a fraction of these figures at just 69, although we are only in August and this should be taken into consideration.
This means that if you are looking to buy property, particularly along the Seven Mile Beach corridor, you ought to act quickly because inventory is reducing quickly. This is good news for existing owners, who should see significant gains in their property values in the months and years to come as inventory dwindles even further.
To bear these predictions out further, we need to take a look at the value of active listings.
In 2014 there were 1,987 active listings at a total value of $1,720 million, averaged out to $865,626 per listing. In 2015 there were 1,716 listings at a value of $1,333 million, averaged out to $776,800 per listing. In 2016 there are currently 1,665 active listings at a value of $1,455 million, averaged out to $873,873. This is a significant increase over the 2014 figure and even more significant over the 2015 amount. I view this as a promising sign that property values are on the up and I’m convinced it’s a trend that will continue.
Note also that the price of new listings has also increased considerably in recent years. There were 1,418 new listings in 2014 at a value of $982 million, on average $692,525 per listing. Now compare that with 1,348 in 2015 at a value of $898 million, so a slight drop at an average of $666,172 per listing. Now compare that to just 858 new listings so far in 2016 at a value of $722 million, on average an impressive $841,492. This shows a pleasing confidence in the market.
I believe these figures denote an interesting shift in the market, with inventory levels falling in all capacities and higher prices from a listing perspective.
One more word on the PR debate
Further to my July update, I would just like to leave a couple of interesting thoughts with readers.
I believe there are three things that create forced sales which negatively impact the real estate market. They are foreclosures due to unstable economies, divorce and an unclear immigration regime. It is the country’s decision as to who should be granted permanent residency and who should not, and it certainly is not mine. But I do worry that individuals who have purchased property as part of a permanent residency application requirement are now being forced to sell because of an unclear immigration policy that has hung in the air for too long.
Forced sales hold down the property market for everyone else. I believe that the normal 5 percent or so of forced sales can be somewhat absorbed, but with this number increasing and potentially going over 10 percent or more, this greatly impacts the market, especially as forced market sales are usually in the $500,000 and below section of the market. This issue is holding down the price and affects Caymanians and non-Caymanians alike and needs to be addressed as soon as possible.