With a stable economy, high standard of living and beautiful environment, the Cayman Islands is also an ideal place for you to own property.
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During the first two months of 2020, development activity in Grand Cayman was as active as it has ever been, owing to strong tourism figures and a flourishing local market. However, the arrival of COVID-19 to Cayman’s shores in March, which swiftly led to border closures and a government-mandated local lockdown for the next several months, has certainly impacted business.
Locally, unemployment rates (particularly in the tourism sector), instances of wage cuts and job uncertainty all rose, and people were more cautious about tying themselves to bigger investments. Yet various stimulus measures, such as pension pay-outs, rent forgiveness, payment deferrals, as well as the gradual reopening of the borders in October has seen some re-stabilising after a very slow second quarter. While a transaction on Seven Mile Beach which was being negotiated before the wider global spread of COVID-19 eventually went to contract at a price 7% below what estimates suggest it otherwise would have sold for, others are closing without any reductions in price!
Despite the Island’s tourism industry effectively shuttering, there is still international interest in Cayman’s real estate market. Compared to the rest of the world, Cayman has fared remarkably well in containing the spread of the virus.
Globally the stock market quickly rebounded after the initial losses experienced during the first half of 2020, and while the US and the UK continue to battle record numbers of COVID-19 infection rates, overseas buyers are increasingly looking to small, attractive locations like the Cayman Islands to make an investment and this is great news for sellers!
The real estate market in Cayman is simple and straightforward. Apart from a one-time stamp duty, there are no annual property taxes or restrictions on foreign ownership by individuals and title is granted and guaranteed by the Cayman Islands Government.
Back in the day (pre-1980) Cayman’s real estate market could best be described as the Wild West. There were no real estate laws, no safeguards, and no consistency of business practices except that it was every man for himself. In 1987 a group of local realtors agreed to work together and founded the Cayman Islands Real Estate Brokers Association (CIREBA)Read More
With no property taxes, owning land in Cayman is a solid and hassle free investment. You can build when you are ready, or sell the land for a profit when it is convenient or necessary.
With the real estate market being so strong, and current inventory being in short supply, it is no surprise that developers are taking this opportunity to replenish the marketplace.
Single Family Homes
Although inventory is slim and sales move fast, there are still a variety of homes available in the Cayman Islands at different price-points, ranging from a 2-bedroom cottage in Cayman Brac for US$162,000 to a waterfront palace in Grand Cayman for US$39,950,000 (October 2020)! 43% fewer single-family homes were sold in 2020 vs 2019 with the average price being 5% less than last year.
The drop in the number of sales during the COVID-19 lock-down should not surprise anyone since the purchasers had to be largely local. However, the fact that the average price was similar to last
year indicates local confidence in the housing market as well as some positive response to local Government stimuli
and international interest didn’t dwindle entirely. Some sales were made during this period by real estate agents who
continued to sell to international buyers with virtual showings and tours.
Condominiums & Apartments
Condos will always be in greater demand than other residential options in a resort location like Cayman. However you should keep in mind the longer you expect to stay in Cayman, the less this living style will fit as many condos are designed for short-term stays both in their physical designs and in their by-laws. It is also worth noting that many of the Island’s new-builds are trending towards smaller unit sizes with equally, if not higher price-points, depending on the area. Before making a purchase, read the Strata By-Laws to ensure they meet your personal requirements and review strata or condominium fees to determine if any assessments are pending and whether insurance payments have been factored in.
There are 601 condos available for sale across Cayman (October 2020), the majority of which are either pre-construction units or in-land developments. A 1-bed inland unit in West Bay goes for CI$120,000, while a 4-bed on Seven Mile Beach at the Watermark is priced at CI$11,479,180. Remember that anticipated sales numbers can be misleading as these are often refundable ‘reservation deposits’ which are subject to some natural fallout during the formal contract process, or some marketed developments may not have funding locked in yet, and may never be built. Talk to someone who is not representing the developer to get a better feel for the likelihood of a certain project coming to fruition.
24% fewer condos were sold in 2020 vs 2019 with the average price being 18% less than last year. Again, the lack of tourist purchasers would have affected the number of sales. A reduction in average price is also an indicator of the lack of tourist purchases as more purchases were likely made in lower cost developments by local buyers. 43% fewer multi-units were sold in 2020 vs 2019 with the average price being 53% less than last year.
Existing units are only coming on the market if the pricing will allow sellers to realise a profit. Nobody really wants to sell their Cayman property, but sometimes the appreciation just gets the best of them; that, and maybe a change of living circumstances (age, divorce, downsizing, etc.). Many property owners in the SMB area live abroad and rent their units out for the majority of the year, but due to Cayman’s border closures in 2020, the rental market was significantly affected as the previously rapid rise of rental rates stopped very quickly. This caused return on investment percentages to drop and prices of rental properties also had to drop to provide a return high enough to attract a purchaser.