Property sales hit new record amid real estate boom

$800 million in sales last year

The WaterMark, a new condo complex on Seven Mile Beach, was approved by the Central Planning Authority. - Architect’s illustration

Last year was the best on record for the Cayman Islands property market with more than $800 million in total sales, according to a review by surveyors Charterland.

The report shows rising house and land prices across most sectors in 2018 as Cayman’s property boom continued.

“We are into unchartered territory in the property market,” said Simon Watson, partner at Charterland, which analyzed every real estate transaction in the Cayman Islands in 2018 to provide the review.

“It is an interesting exercise to see if the sales figures confirm what the realtors have been telling us throughout the year. This year it absolutely has,” he said.

“The market has recovered from the downturn of 2010 and is now way beyond the previous peak.”

He said rising demand and rising prices on Seven Mile Beach were largely a reflection of the strength of the U.S. economy, but the ripple effect is starting to be seen in other sections of the market.

Land values rose in Savannah, an enclave of mostly mid-range residential development, for the first time in a decade, the report shows.

“The market is booming without a doubt,” Mr. Watson added. “We obviously have to keep an eye on the situation in the U.S., but I can’t see any huge red flags on the horizon right now.”

The report indicates there were 1,857 property transfers in 2018, a 9-percent increase on the year before. The total value of those sales was just over $800 million, up 18 percent from $679 million the previous year.

The highest single value sale was the $45.7-million purchase of a 2.8 acre piece of land fronting Seven Mile Beach. The site is being developed into a luxury, 10-story condo complex to be known as The WaterMark.

The sale of the Holiday Inn to a Chicago-based developer for $15.6 million was the next biggest deal on the books.

The CIBC Financial Centre in George Town sold for $8.36 million in the third highest value sale of the year. In the residential market, the biggest sales involved major resort properties. An 8,000 square-foot property at The Ritz-Carlton residences sold for $8.15 million, while two properties at the Seafire Residences, next to the Kimpton, sold for $5.83 million and $5.33 million, respectively.

The report shows there were fewer sales of Seven Mile Beach condos than in previous years, but the total value – an average of $1.3 million for the 101 sales of beachfront condos – was up significantly.

“This would indicate that the decrease in the number of sales is as a result in a lack of inventory rather than diminishing demand,” the report continues.

Looking at future development trends, an analysis of planning applications to the Central Planning Authority shows a decrease in the value of approved developments over the last year.

Mr. Watson said it was hard to read too much into this figure because one or two major developments, for example the Grand Hyatt planning application and the NCB boutique hotel in 2017, could distort the figures.

He said there was still a high number of projects being approved, though these skewed more toward residential development in 2019.

He said the development appeared to be well spread across all sectors from affordable housing to luxury condos, and he does not believe that there is currently any concern about construction outpacing demand.