In this update I think it is timely to reflect on the year that has past and the impact it has made on the industry. 2017 was probably one of the strongest years we have ever had in the real estate industry. Indeed the past two years have seen an extremely strong and active market with high demands and slowing inventory.
What has struck me as particularly unusual about the activity of this past year has not just been the robust activity along the prized Seven Mile Beach corridor, but the activity elsewhere on island as well. Indeed, elsewhere we have seen activity that mirrors the numbers of the busiest Seven Mile Beach corridor of just a few years ago.
We have seen all sorts of different transactions take place this year: those undertaken by foreign investors looking for a safe place in which to watch their money grow; investors looking to invest in the commercial and industrial sectors; and investors buying multi-family residential properties.
Our most active segment of the market is still Seven Mile Beach and it has been interesting to note that the demographics of buyers in this area have changed, from at one time pretty much only foreign investors, to now including local buyers as well. Now, as I have been frequently predicting, inventory is at an all-time low. A case in point, I searched the MLS system a few days ago for a three bed/three bathroom beachfront unit on Seven Mile Beach and the search came up with just three available, none of which were less than $4.25 million, and two of which were under contract.
As far as the local residential market is concerned, the challenges it faces are those faced by the Seven Mile Beach corridor perhaps ten years ago. There is a good amount of activity but buyers are preferring to build themselves or buy a brand new property over buying existing, older property. This is a normal part of the buying process because buyers tend to look for new builds so they can take advantage of efficiencies and technologies not available to them in older properties. I also see residential buyers gravitate towards community-orientated developments, which seems to be where the driver is for such prospective buyers.
The question is then why is Cayman’s real estate industry enjoying such a boom? It ultimately comes down to the same set of fundamental benefits that we enjoy in this location, of which I have written about frequently. We offer a safe and stable environment in which to live; we offer a stable government and a tax neutral investing environment, making the most of the financial efficiencies our professional service providers can offer investors; and we have an amazing, beautiful location in which to live, work and play. Since we have the basics in place conducive to a uniquely harmonious environment, we were then able to build upon other benefits, including first class education, dining, entertainment, infrastructure, sports and social activities.