High-end home sales getting stronger

I’d like to focus my update this month on a particularly interesting area of the market, that of the high-end residential home, i.e., those in the $3 million bracket and higher (with no price limit).

This area of the market has seen slight variances in recent years. According to statistics from the Cayman Islands Real Estate Brokers Association (CIREBA), three homes in this price range have sold so far this year (at the time of writing, to July 18, 2017). We had three homes sold during the same time frame last year, two in 2015, one in 2014, three in 2013 and 2012, and just one in 2011.

With the knowledge that there are additional sales in the coming month, I am confident that 2017 will be a buoyant year for sales of these high-end residential homes.

I have always been of the opinion that sales of these types of homes would come back and be more the norm going forward with an increase in coming months and years. This is primarily due to vacant parcels of land on which to build these luxurious properties are becoming limited, given the superb aspect homes in this price range require for such a high price. In addition, buyers can sometimes be put off by the unpredictability of construction (especially when it comes to costs), the time it takes to build and the challenges that go along with such a project. Buying a high-end home is therefore becoming a highly attractive proposition.

“Location, location, location” is an adage often applied to successful real estate sales and this particularly applies to high-end residential homes here in Cayman. But what makes a beautiful home a $3 million home rather than a $2 million home? The answer is the view. Location is therefore key for a home to attract a higher price tag. If a home has gorgeous sweeping vistas of the North Sound, for example, it will command a higher price tag than one with a canal view.

Next, people are enticed by the quality of the build. Top quality furnishings and construction will always command higher prices. Square footage, layout and design are also important aspects that feature in a client’s wish list for a high-end property.

Homes that have been taken to the next level, in terms of location, quality and design will always offer more for buyers and will therefore cost the most. In my opinion, such homes are becoming increasingly attractive, and we will start to see a shift to sales volumes of old later this year. Buyers are frequently local residents looking to upgrade their existing homes, and I have also seen interest from part-time residents who own condos but who are looking for a more expansive property to call their own.

It is therefore an exciting time for high-end residential home owners looking to sell in the coming months ahead.

James Bovell is broker/owner at RE/MAX Cayman Islands.

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1 COMMENT

  1. The article above is interesting and tells some of the story of real estate sales in Cayman. Thanks to the Compass for publishing this information.

    However, like much of the financial information relating to the CIG the whole story is not told. While it is discouraging to hear only 3 high end homes have been sold this year, the story omits the fact that there are 43 high end single family homes up for sale and listed on CIREGA. Many of these homes have been on the market for over 2 years. The entire time I have lived in Cayman. That seems to be a bit of a stretch for a “hot” market, especially because the article fails to note how many of them are foreclosures.

    I understand Mr. Bovell’s business partner recently wrote a story about foreclosures, and it too was very enlightening. However, it too failed to give the whole story on the topic, foreclosures.

    Because the CIG holds real estate ownership and sales information closely guarded, and excessively expensive for the public to obtain and analyze, ($6,000 per year for an online subscription) it is difficult to truly understand the Cayman Islands Real Estate Market. The Cayman Islands Real Estate Brokers Association (CIREBA) is of little help as well. With it’s newly redesigned website, it continues to make capturing, sorting and analyzing CIREBA listing difficult. Here to, the organization could help the public by closely policing sales descriptions, prices and locations. In addition it would be helpful to sellers and buys alike to have “time on market”, “sale type” (regular, foreclosure, bank owned) and other information such a price per sq ft of air conditioned space, price per sq ft of the entire site, etc., on the listings. This information would be a great help to potential buyers and to sellers alike. Armed with this information and more, buyers could make informed decisions, be better assured they are making the right decision. Sellers and Brokers alike could research, current listings to determine the best price to list their property; instead of picking a price out of the sky and sit around for a couple years hoping for a sale.

    It is very doubtful to me that there are many people buying homes (or condos) and then deciding to move up. In order to come out even on their deal, a seller would need to add at least 10% to the purchase price of his home, just to cover the high government transfer tax and real estate commissions. Thinking about those fees, and then adding an additional 7% for the new home, that’s 17% above the cost of the new home just to get out of one house and into another! Perhaps CIG should offer discounts on the transfer fees to people who already paid the 7% fee and are now “buying up”. Better yet, CIG should exempt the entire sale from the fee if it is a “buy up” situation.

    Many people watch the real estate market, including myself, but all find the amount of data available on a regular and accurate basis to be lacking.

    Come on CIG —– share that sales information —- Come on CIREBA —– publish useful, adequate listing information for all your listings! Make the CIREBA website a genuine tool to promote sales and inform buyers and sellers the reality of the Cayman Islands Real Estate Market.

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