Luxury property development has a key role to play in the future of the Seven Mile Beach corridor and in driving Cayman’s economy, real estate industry insiders believe.
Michael Joseph said international demand for beach-front homes in Grand Cayman was at an unprecedented high at a time when there is less property on the market than ever before.
Solving that conundrum in a sustainable manner is key, he believes, to managing the future of the beach and surrounding area.
Joseph, who owns and runs Property Cayman, said Cayman’s successful COVID response had created a fresh surge in demand from investors who view the islands as a safe haven in a chaotic world.
He acknowledges there are environmental concerns around over-development of the beach, but believes these can be resolved with good design and good planning.
He said a series of new projects including the Lacovia development – which will replace older condominums – were more sustainably designed than what they are replacing.
In a post-COVID world, Joseph believes wealthy property investors can actually provide a better return for the island than mass tourism.
“Luxury property owners are best viewed as high-spending, long-stay tourists that provide the biggest economic impact with the least environmental impact,” he said.
“Cayman perhaps could lean into being the luxury, exclusive place with an emphasis on quality over quantity.
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“The economic impact from a single high-net-worth visitor far outweighs the revenue generated by numerous cruise ship passengers and doesn’t cause traffic and big environmental concerns.”
While some question the impact of development on Cayman’s economy, Joseph points to construction jobs, the relatively high spending power of luxury property owners and direct government revenue through stamp duty among the key benefits.
During lockdown, Joseph says, he sold the most expensive home in Cayman’s history – a $14 million property in Vista Del Mar. From that sale alone, government netted just over $1 million in tax.
In 2019, according to Simon Watson of surveying firm Charterland, government pulled in $76 million – 7% of its total annual revenue – from stamp duty on property sales.
The number was down slightly in 2020, but the $60.5 million netted from that source was highlighted by government as one of the reasons the country’s finances are still in reasonable shape despite the impact of the pandemic.
Watson cited higher buildings with deeper setbacks and an increased number of developments that follow the Lacovia formula – the demolition and replacement of older properties with newer luxury offerings – as the likely blueprint for the future development of the beach.
“I see a continued trend of the older, less densely developed condominium developments being bought out for re-development with higher-density, higher-end developments such as we have seen previously with the old Caribbean Club and now at Lacovia.”
He said a further increase in the permissible number of storeys would be a means of counter-balancing environmental concerns around beach erosion with the needs of developers.
- This story is part of our ‘Seven on Seven’ feature series this week looking at the future of development in Cayman, and in the Seven Mile Beach corridor in particular, from multiple perspectives.