Direct correlation between Immigration policy and real estate market
Following on from November’s newsletter, which was devoted to Cayman’s changing immigration policies, this month I want to talk about a relatively new push of activity in the marketplace in relation to the purchase of canal front lots and how, I believe, this is a result of improved immigration policy.
The CIREBA MLS (multiple listing service) currently shows that year to date (28th November) 24 canal front/canal view lots were sold (in areas such as the Yacht Club, Crystal Harbour and Governor’s Harbour, etc.). In 2010 that figure was just 10, in 2011 it was 23 and in 2012 it was 13, thereby showing a significant increase in interest in these particular lots. These numbers do not include transactions for canal front parcels sold by developers in areas like Vista Del Mar and Salt Creek that were not recorded by CIREBA, which would further emphasize the demand for these types of lots.
In addition, there are only 38 land lots with canal front or canal view currently for sale in this same area and 30 residential homes currently listed for sale in the area. Out of this 30, 24 homes are listed as canal front (23 of these are listed for over US$1,295,000, and the highest is $5,995,000); two are listed as canal view; one is listed as golf view (but on a waterway); two are listed as waterfront and just one is listed as water view and priced at US$9,995,000.
In my experience, the majority of people looking to purchase canal lots tend to be island residents, which indicates to me that many people here are comfortable with their plans to move forward with regard to their residency. This is excellent news for the industry and also the country as a whole, as it highlights the fact that residents are not stockpiling their cash with a view to eventually sending it off island; instead they are now happy to make a sizable investment in Cayman property as they feel that it is their home.
It should be noted that the levels of investment by residents have significantly increased in recent years. Five years ago it was rare for a local resident to purchase land with a view to developing property anything over $2 million, but that has changed now.
I believe that investment comes with sound immigration policies and that there is a direct correlation between these policies and the real estate market. People start to purchase property when they start to feel secure and I believe that the new policy with regard to permanent residency will bring about a new feeling of security for would be investors already living here. A word of caution, however, I believe these policies need to remain static to retain the feeling of confidence. Further changes to the system may upset the stability. Government needs to stick with the current legislation and follow it through, with the one caveat of removing the 5 year prior time to application for equity consideration.
The WaterColours nears completion
One ocean front property that is gaining tremendous ground in nearing completion is the magnificent WaterColours on Seven Mile Beach. Working towards completion in April, the WaterColours developers have made great strides with internal finishings, for example the cabinetry is currently installed up to eighth floor, flooring is installed up to ninth floor, the pool works foundation is completed, and construction is centred on working on shell and structure, while the pool deck foundation is completed. As far as the exterior finishings are concerned, Dryvit is 60% completed on the exterior of building and construction is taking place on exterior services, such as the front retaining wall and boundaries. It won’t be long now until new WaterColours residents will be walking into their stunning residence for the first time.
There has been significant strengthening within Cayman’s commercial property market recently with shopping plazas and malls, particularly in the West bay Road area, noting near 100% occupancy, another positive indication that Cayman’s real estate industry is moving into a buoyant phase. Even though for-lease signs are presently posted at several properties, vacancies for rental opportunities are actually few and far between.
West Shore Center currently has no vacancies and all vacancies at Galleria Plaza are under contact to be leased. Buckingham Square has no vacancies, as all advertised vacancies are under contact and the Marquee Place also has no vacancies. There is limited space available at the 7 Mile Shops, with 1,000sq.ft. available, Fidelity Financial Center, with just 2,000 sq. ft. of commercial space available on the second floor and likewise at the brand new Caribbean Plaza, there is currently just 7,200 sq. ft. of commercial space available on the second floor, which can be subdivided into two equal sections.
I believe this is a very positive sign for Cayman’s real estate industry as we move into this busy winter season with further optimism for a strengthening of our economy and positive growth for industry across the board.