To build or buy? That is the question. If you’ve wondered about the average cost to build a house in the Cayman Islands, you’re not alone especially with the limited inventory available in the market.
Building a home comes with many benefits and some headaches if we’re being perfectly honest. Several challenges brought on by the COVID-19 pandemic include supply chain delays, the increasing cost of materials, and labour shortages which have impacted the cost of building not only for a single-family home but for everything else as well.
I thought I’d take this opportunity to explore the advantages, challenges, costs and timelines to build a home in the Cayman Islands.
The advantages of building
Having been through the building process personally I can tell you that there are many advantages to building your own home.
The best thing about building your own home is that you can build exactly what you want room by room. You have the final say on the layout, features, fixtures and finishings. On top of all of that, there is the thrill of watching your dream home come together.
With respect to the design of the house the sky, or should I say your budget, is the limit. One of the most important things to consider when designing your own home is how your lifestyle will play a central role in the design of your home. It is also important to keep in mind potential resale in the future when finalizing your home designs. You do not want to over personalize the home. For example, one very customized feature that you want may not appeal to many if any buyers in the future.
Do you work from home and need a quiet home office? Do you have children and need a certain number of bedrooms? Do you need larger rooms for the children to allow room for a desk if they have to attend school from home again like we did during the pandemic? If you don’t have children, are you planning to start a family? Where do you spend most of your time in your current home? Are you a chef at heart and want the dream kitchen? How many cars do you have? Do you want a garage for one or all of them? How much storage space will you need to accommodate your hobbies such as kite surfing, paddle boarding, bicycling or maybe all the above?
These are just a few of the many questions you will need to ask yourself when designing your home.
One of the biggest things I see missed when people design their own home is interior storage. It’s important to ensure the inside of your home has adequate storage to prevent everything from being pushed into the garage.
The challenges of building
As I mentioned above, having just completed building my own family home, I can also tell you that there are a lot of challenges and I started building before the pandemic.
When building your own home, it is important to have a very clear idea of what you want your home to look like and how you’d like it to feel. It’s also very helpful to be able to make a million decisions as you will be choosing every single item that goes into the build of your home from the mundane of what type of water heater you want to the exact faucet you want in your kitchen, and I’ll let you know there are over 4,600 different kitchen faucets at Home Depot alone.
Even pre-pandemic it was common to see delays in construction in the Cayman Islands which is due to the fact that basically 100% of materials needed to build a home from cement to lumber to wiring to appliances to everything in between is shipped to our islands.
As I’ve discussed in previous articles, supply chain delays and materials costs and availability along with labour challenges have delayed construction and driven up prices across the board not only in the Cayman Islands but on a global basis.
Even though things are slowly getting back to normal there are still supply chain issues. For example, BURNCO, a North American ready-mix concrete producer, says it’s experiencing issues with supply chains (particularly with machinery, repairs, and maintenance) and global constraints limiting the amount of raw materials available to make cement.
The construction industry is experiencing an unprecedented level of market volatility across several supply chain categories, including copper, resin, logistics, vehicles, steel and more. This volatility rears its ugly head in many ways: manufacturers issuing force majeure letters on supply commitments, long lead times for manufactured goods, more frequent price increases and product availability warnings.
How long will supply chain issues last and will prices for construction materials continue to climb and for how long and how high? That is the million-dollar question. Some believe we should expect to operate under the current supply chain struggles for at least another year or two. That the global economic conditions exacerbating these issues are complex and will take time to resolve. On the other hand, some costs are coming down. For example, lumber prices are going down again after hitting new lows for the year as the U.S. housing market continues to cool off.
The cost of building – land
Choosing the right piece of land for the home you want to build and the lifestyle you want to create around that home is one of the most important decisions when deciding to build. I believe a lot of pre-planning into your build should be done before you choose your ideal lot. It’s important to remember that once the lot is bought and the house it built, it cannot be moved to a bigger lot, a lot on the water or a lot with different views.
A lot of people buy a lot and then start to develop the house plans. It is important to note that not all lots will fit the design you ideally want to build.
For such a small island, there are an abundance of options when it comes to the type of land available. That’s not to say there are is unlimited amount of land listings for sale, as there are only 265 currently listed in the MLS many of which are larger development sites, but there is a lot of variety out available.
As with the home itself, it’s important to keep in mind the type of lifestyle that you want to live. Is it important to be on the water? If so, do you want oceanfront or canal front? Do you want to see morning sunrises or evening sunsets or both? What direction do you want the home to face? Do you want more land versus a more desirable location? Do you want to be close to the entertainment along Seven Mile Beach and George Town? Do you want to feel away from it all when you get home in a quieter neighbourhood? These are just a few questions that are important to ask when determining where to buy land.
As you would expect prices for land vary throughout the island. Two main factors drive land prices: location and size. Something on the Sea with unobstructed panoramic views capturing the best sunset views is going to be more expensive and rarer especially like North West Point Waterfront Parcels that features views looking down Seven Mile Beach. This is a 0.58 acre lot which is currently priced at CI $2,449,000.
Yacht Club Drive at Lighthouse Point is another spectacular and unique parcel of canal front land. At 0.39 acres the shape of this lot offers over 142’ of water frontage and captures amazing sunsets. Priced at US $1,995,000 this lot’s unique shape could let itself to some spectacular home designs.
As would be expected land costs less on a per sq. ft. basis the further outside of Seven Mile Beach and George Town you go. If you are looking to build a true estate home on a large piece of land you may want to look further out. A parcel like Pease Bay features of 200’ of Sea frontage in a lovely, small, and thus much quieter community. Priced at US $1,800,000, this uniquely placed lot captures both sunrises and sunsets and at 0.97 acres you’d have room to create a truly stunning private compound with room for a large pool, tennis court, and more.
If a private secluded home is your ultimate dream, it’s important not to rule out the Sister Islands where land is much affordable than anywhere in Grand Cayman. Parcels can be purchased for as little as CI $32,050 for a smaller inland parcel on Cayman Brac such as Autumn Place and CI $215,000 for a beachfront parcel in Little Cayman, which is one of the lowest priced Sea front parcels currently listed in the Sister Islands.
If you are considering building your own home but may not be ready today or even in the next year or two, it would benefit you to purchase land now. The reality is that land prices are going to keep increasing in the Cayman Islands.
Coupled with that is the fact that once land is sold and built upon there is one less parcel of land available for development. In fact, it may benefit you to purchase the land now, wait a few years and then begin to build. This will give you time to make payments on the land, if needed, as well as lock in at a lower price per sq. ft. compared to years to come. By getting the land sooner, you could also have built up further equity via appreciation of the land itself. This would help you with financing.
The cost of building – the home
The average price to build a single-family home in the Cayman Islands starts at approximately US $240 per square foot for a modest house to US $500 and up per square foot for high-end housing. Depending on where you decide to build there could be additional costs.
Of course, there are a myriad of factors that contribute to the final cost and there are some things you can do during the planning or building process that can help reduce the cost of building a home.
Consider several contractors to bid on the home. It is important to remember that the cheapest builder is not always the best. There’s often a reason that a contractor is coming in low, and it could be that they sacrifice deadlines or cut corners on quality. Do your research and make sure you approach contractors with experience with the type of home you are building.
One of the best pieces of advice is to speak to the previous clients for each contractor. It is critical that you find someone that you are comfortable working with and are qualified to do the job but even more importantly is someone you can sit down with and work through any challenge you may encounter during the process, without being taken advantage of. Of course, if you need guidance in this area, this is something I can help you with.
One of the other things to ask your contractor is to review the contractors they work with who will be doing the work on their behalf.
Some people are quite handy or know friends that can help. Significant savings on labour costs can be found by doing some of the work yourself. Some of the easiest things to take on are painting and installing light fixtures. Handier people will often install their flooring or kitchen cabinets once all the plumbing and drywall are complete.
The cost of building – the yard
Since the pandemic and with a shift to more people working from home either full or part-time, yards have become much more important to buyers when looking to buy a new home. With our year-round tropical weather in the Cayman Islands our outdoor space has literally become a direct extension of our homes. Many homes truly embody the sentiment of indoor/outdoor living.
When buying land to build it is not just important to keep in mind the size of the structure you want to build but how much outdoor space you want and what outdoor features are most important to you.
If you want to purchase a canal lot like Marquise Drive, a corner canal front lot in Crystal Harbour, do you want a dock for your boat and if so, what size boat would you like to moor at the dock? Do you want a pool and if so, what size and shape? What about landscaping? Does the lot require a lot of landscaping? If the lot is a corner lot like Marquise Drive, you may not need to budget as much for landscaping as you want to keep the views of two sides of the lot facing the canal as unobstructed as possible.
This is one area where over the years I have found homeowners can make a mistake. They look at their landscaping as an afterthought. In other words, it is the last part of a house’s overall development but it’s the one thing that everyone sees. It’s the wow factor that everyone will notice and can ultimately make the difference in the future between a sale and someone walking away. A first impression is everything let alone the enjoyment you can experience every day.
Covenants
Many subdivisions have restrictive covenants. These would be registered on your parcel and the other parcels within your community to be enforceable. It is important that you read and understand these covenants as they can be very restrictive in some cases but to keep in mind that these help preserve your value and the consistency throughout the subdivision.
How long does it take to build a house?
Right now, in the Cayman Islands from start to finish, from buying the land to moving in, I would estimate (current environment) that the least amount of time would be a year and half. The tricky part is there are a lot of moving parts with respect to building a home and all these take time.
Maybe you own the land already or you’ve just closed on a piece of land. This doesn’t mean you can build tomorrow. You may need to have the land cleared or remove an existing structure or if it’s already cleared you may need fill to raise the structure up or to level the land itself. This all takes time.
In conclusion
Building your own dream home can be one of the most fulfilling yet frustrating adventures you can undertake. But the benefits greatly outweigh the headaches you will encounter during your building process and once you get into your dream home there is nothing quite like it.
Make sure you buy the right piece of land for your dream home and if you can buy it sooner rather than later the better especially if you are looking to build in a very popular location where land is scarce such as Seven Mile Beach, South Sound and anything located on the water with substantial Sea frontage. Prices will continue to increase on land. When another parcel of land sells there is less available for purchase or development. It all comes down to supply and demand.