Happy New Year! I would like to begin my updates this year with an over-arching look at the current state of Cayman’s real estate market.
We begin this new year buoyed by the successful performance over the past 12 months of Cayman Islands real estate, which has strengthened significantly in most areas. In the most part, we head into 2017 in a seller’s market, with less inventory available and more demand pushing up prices and giving sellers the upper hand.
That being said, there are still areas of the Cayman market which I would suggest indicate a buyer’s market because I feel prices in these areas do not reflect the potential that could be attained. Such areas are farther out toward the east of the island, such as Savannah, Newlands and Lower Valley, where desirable properties are sometimes next to not-so-desirable properties, creating a challenge for sellers. These areas offer lots of opportunities for savvy investors, but it should be noted that the community aspect of a property is crucial to its salability. How your neighbors maintain their property directly impacts on the price you can obtain for yours.
I also believe that there is an opportunity when it comes to buying property that is still in the pre-construction phase. At this early stage, stamp duty costs are lower than on finished homes. You then also have the added benefit of owning a brand new property, so it is well worth investigating in new projects about to launch.
Focus on Seven Mile Beach
Over the past 12 months I have seen intense interest by high net worth individuals in Cayman’s luxury property market, with investors from overseas looking to purchase a second home here for either investment purposes, a holiday home for the family, or as a second residence. This means that high-end homes and condominiums along Seven Mile Beach are becoming scarcer every month. Along this stretch of award-winning beach, I believe the availability of inventory will become increasingly challenging as we look to the year ahead, with availability being a bigger issue versus pricing.
New opportunities for investors
Away from the residential market, it is interesting to note that there are several mixed-use commercial properties that are catching the eye of overseas investors, and this is a positive area for buyers looking to accumulate these types of assets for their portfolios. Such investors say they are focusing on investing in Cayman because the stability of the destination is attractive from an investment perspective.
I’d like to write a final word on Cayman’s rental market, which has seen a tremendous increase in recent months, no doubt due to the opening of the Kimpton Seafire, which has required considerable rental properties for its staff. The same can be said for when Margaritaville comes online, as well as the Four Seasons hotel, a lot further down the line.
All these new properties not only help to fuel the local rental market, they also help to drive new business to our islands, attracting new customers loyal to their brands who may not have previously considered visiting the Cayman Islands. This is all positive news for Cayman as we look to the new year with excitement, and hope for an even stronger year ahead.