As we get ready for what are the traditionally slower months for the Cayman Islands real estate market as many people are on summer holidays and off island, I thought I’d take this opportunity to dive into a market overview for the first half of the year looking at solds, pendings and new listings as well as changes in the price per listing in these three categories and how inventory levels are all affecting the Cayman Islands real estate market.
Solds Transactions and Volume
When you look at sold transactions on a quarter-by-quarter basis, for Q2 2023 we saw 203 sold transactions. This is up from 164 in Q1 2023, an increase of 23.8%.
The story is similar on the sold volume side on a quarter-by-quarter basis. For Q2 2023 we saw $242,420,994 in sold volume. This is up from $191,385,155 in Q1 2023, an increase of 26.7%.
The sold volume is increasing at a higher percentage than the transactions indicating that the overall price of properties being sold in the Cayman Islands are continuing to increase.
Average Price Per Sold Transaction
The average sales price per sold transaction in Q2 2023 was $1,194,192. This is up from $1,166,982 in Q1 2023, which is an 2.3% increase quarter-over-quarter.
Pending Transactions and Volume
Coupled with sold transactions and volume up both quarter-over-quarter, the Cayman Islands real estate market is still robust as you can see from the pending transactions and volume.
For Q2 2023, we saw 153 pending transactions. This is up from 150 in Q1 2023, an increase of 2%.
When you look at the value of these transactions, for Q2 2023, we saw $216,876,038 in pending volume. This is up from $212,277,425 in Q1 2023, an increase of 2.2%.
You can tell a lot about the overall health of the Cayman Islands real estate market when you look at pending transactions and volume. People are continuing to buy property in the Cayman Islands and the value of the properties being purchased are increasing, percentage wise, at a slightly higher level compared to the transactions showing that overall prices are continuing to increase.
Average Price Per Pending Transaction
The average price per pending transaction in Q2 2023 was $1,417,490. This is up from $1,415,182 in Q1 2023, an 0.2% increase.
As you can see the percentage of average price per pending transaction although up is quite small. This directly relates to the shift I mentioned in an earlier article wherein I stated that real estate prices are continuing to increase but not at the level they have been over the past 4 years.
The last 4 years have seen rapid appreciation and the market is cooling off a bit. Over the last few months, we have been seeing new listings coming onto the market where pricing is overzealous in anticipation that the appreciation will continue at the rate that we’ve been seeing over the last few years. This means that some properties were being overpriced which leads to them remaining on the market longer and eventually having price reductions.
This is clearly outlined when you look at new listings on a quarter-over-quarter basis.
New Listings
For Q2 2023, we saw 407 new listings hit the market. This is down from 413 in Q1 2023, a decrease of 1.5%.
When you look at the value of these new listings, the 407 new listings in Q2 2023 are $718,061,764. This is down from $793,961,574 for the 413 new listings in Q1 2023, a 9.6% decrease.
This decrease is not surprising. As I mentioned above, much of the pricing at the beginning of the year was overzealous and consequently over the last few months we have seen a substantial number of properties being reduced, much more so than over the last few years since the boom of the Cayman Islands real estate market.
Average Price Per New Listing
The average price per new listing in Q2 2023 was $1,764,279. This is down very slightly from $1,922,425 in Q1 2023, an 8.2% decrease.
This decrease in the average price per new listing is primarily driven by sellers and sellers’ agents more accurately pricing properties for the current market. It doesn’t not mean that prices are going down as both the pending and solds volume are both up.
Inventory
In the first half of 2023, we’ve seen 820 new listings come into the marketplace and had 367 solds, which means inventory levels are climbing. As of today, there are 1,623 properties for sale in CIREBA but of those 425 are pending, which means there are only 1,198 properties actually available for sale.
The current inventory of 1,623 is definitely the highest it has been in at least the last 5 years, if not more.
In Conclusion
The Cayman Islands real estate market is not booming at the level it has been since the Fall of 2020 and overall, the market is seeing some slowdowns especially when you look at the increase in inventory, but we are definitely not moving into a buyer’s market. It all comes down to supply and demand.
As we continue through the rest of 2023, I believe we will continue to see the Cayman Islands real estate market continue to normalize. Overall sold transactions and volume are up quarter-over-quarter, which is good news but not entirely unexpected. Q2 transitionally outperforms Q1 on a year-over-year basis.
As I discussed in my previous article, inflation and increasing interest rates are impacting the Cayman Islands real estate market like all others especially for many non-cash buyers. Right now, I believe some non-cash buyers are in a holding pattern, but I’m not seeing this as the norm.
There is a lot of “talk” about interest rates flattening or starting to come down, but there is also “talk” that rates could in fact jump again.
But the reality is, this is a small market and what the volume numbers are definitely showing us is that a sale today is higher than the price paid yesterday. People who are in a position to buy are continuing to move forward.
With all of this said, I believe that real estate in the Cayman Islands remains and will remain a sound investment into the near and far future. If you have any questions or would like more information on real estate in the Cayman Islands, please do not hesitate to reach out to me or my team at +1 345 945 4000.