The number of people losing their homes to foreclosures in the Cayman Islands has reduced significantly over the last few years, according to data from realtors.
There were 67 forced sales concluded last year on homes, businesses and land plots in the Cayman Islands, down from 116 in 2015. Those sales figures, from the Cayman Islands Real Estate Brokers Association, include properties that have been on the market for several years.
According to Kim Lund, of RE/MAX, there are relatively few new foreclosure properties coming onto the market. He said there were currently 43 such properties for sale, many of which had been on the market for some time.
“Fortunately, we are seeing less and less foreclosure sales, every year now. Last year, we only had 67 foreclosure sales. We hope this trend continues until there are no foreclosure sales, with no one being forced to sell their property,” he said.
Jeanette Totten, president of CIREBA, said the real estate market was starting to feel the effects of the economic recovery.
She said there were fewer foreclosed homes on the market and those that were listed were selling quickly for closer to market value.
“The whole economy in Cayman is in a lot better shape. There is not a lot of unemployment, people are not being foreclosed on as much. There’s a lot less [foreclosure properties] out there than there was a couple of years ago and a lot of forced sales are getting multiple offers on them as well,” she said.
“The market is very strong right now. You have projections of more people coming on island and anything within a realistic drive of George Town is being picked up very quickly.”
Michael Binckes, also of RE/MAX, said he used to handle a significant number of foreclosure properties. He said this had declined drastically.
“Right now, I think I have two properties on the Brac and that is it. For me personally, it is about 5 percent of what it was a few years ago. There is hardly anything coming through from the mainstream banks.”
He said the vast majority of forced sales were victims of the 2008 recession, with the impacts, in some cases, taking several years to filter through as banks attempted to work with mortgage holders before eventually losing patience.
Before the recession, he said, property prices in the Cayman Islands were very high and people who had bought properties without putting in equity struggled, like homeowners elsewhere in the world, to keep up with mortgage payments after the crash.
The property market is running high again, with prices continually rising in most sectors.
“The market is high at the moment but banks are being more conservative about their lending practices,” he said.
He cautions, however, that there are still no regulations to protect banks or home buyers in Cayman.
“You can still buy property without putting your hand in your pocket,” he said.
Ms. Totten said the best approach for anyone who was consistently unable to meet their mortgage payments would be to sell their property themselves.
“The smart thing to do if you find yourself in that position in this kind of market is to put it on the market yourself before you get foreclosed on.”
She said homeowners may have to accept an offer of slightly below value for a quick sale, but they would avoid the more costly process of a foreclosure.
Mike McWatt, managing director of Butterfield Bank, added, “We are seeing a decline in new foreclosures in line with market trend. We make every effort to work with clients that are experiencing difficulty making mortgage payments to reach a mutually acceptable repayment arrangement, and we view foreclosure as a last resort.”