Positive signs for Cayman real estate in New Year
In the past, I have looked at analyzing sales on the island and specifically along Seven Mile beach in terms of bedroom count and price.
Over the past several years, the trend has been to build larger and more luxurious condos along the beach, and as such, the majority of the newer developments are three bedrooms or larger, priced at over US$1 million. Therefore, the majority of the properties under US$1 million are slightly older two-bedroom condos.
While sales numbers along Seven Mile Beach in both of these segments have been consistent over the past three years, I foresee sales, especially in the two-bedroom, under US$1 million segment, taking off this year. I am excited about the prospects for Cayman’s real estate industry for this new year and still do expect sales of the larger more luxurious and higher priced condos to remain constant.
Over the past three years, many buyers have taken advantage of the fact that there is inventory in the under US$1 million price range that is well priced. There are still some great deals and many fixer-uppers in this price range. However, based on my experience in the Cayman market and given the trends in North America and the type of inquires of late, I see things definitely picking up in this segment this year, and this inventory will dry up.
Uptick in North American market
My view is that as the housing market picks back up in North America, many upper-middle income North American families are once again beginning to feel financially secure and see a return in disposable income. They now see this dream of owning a vacation property as once again being financially manageable and attainable. A Caribbean vacation home is often the first choice for many North Americans thinking of investing in a vacation property that they can enjoy over the years – a property that will hold its value and one that can still bring in some income to help cover the mortgage. Cayman offers all this and more.
Currently, along Cayman’s prized Seven Mile Beach area there are some 160 properties for sale, according to statistics provided by the Cayman Islands Real Estate Brokers Association at the beginning of this month. Included in these 160 properties are 60 (38 percent) listed for under US$1 million, 100 (62 percent) are listed for over US$1 million, and of these listed, approximately 30 are pending sale, of which 90 percent are from the luxury WaterColours development, set to open in April – all priced at over US$2.5 million. So if we remove the pending sales, there are approximately 60 properties under US$1 million and 70 properties over US$1 million. These listings include the following: The Ritz-Carlton, Grand Cayman has 11 properties for sale; there are six at Caribbean Club, seven at Pinnacle, five at Meridian, seven at South Bay Beach Club and three at Laguna del Mar. There are perhaps one or two properties for sale at Avalon, Cayman Club, The Great House and Beachcomber all listed for over $1 million. Of the ones listed for under $1 million, these are mostly Sunset Cove (Treasure Island), George Town Villas and Plantation Village.
Another segment that I’ve also commented on recently is the demand for canal-front property, specifically land. This trend I expect to continue this year, and those recently receiving permanent residency continue to put down roots and invest in Cayman, building their dream homes.
Strength in numbers
In reviewing past sales, last year there were 61 properties sold along Seven Mile Beach, excluding the WaterColours sales, which are not shown yet as construction is not completed. Of those, 38 were less than US$1 million, at locations such as Sunset Cove and George Town villas, and an impressive number of sales surpassed the US$1 million mark, including seven at The Ritz-Carlton, Grand Cayman, two each at Renaissance, Caribbean Club, Pinnacle, BeachComber and Cayman Club and three at Laguna del Mar. This is interesting, as it shows a large number of people interested in this high-end, larger, luxury segment of the market.
In 2012, there were 59 properties sold along Seven Mile Beach (excluding WaterColours) and 38 were less than US$1 million, which shows a similar trend to 2013’s figures and how the inventory is reducing over time. A selection of properties sold in 2012 include two at Water’s Edge, Coral Stone Club and at the Great House, one each at The Ritz-Carlton, Grand Cayman, Caribbean Club, Renaissance, Pinnacle, Lacovia and Plantana, and three at Laguna del Mar.
In 2011, 61 properties were sold in total along Seven Mile Beach (excluding WaterColours) and 39 were less than US$1 million, again reflecting the trend that inventory along Seven Mile is slowly dwindling. There were two sales at Water’s Edge and Beach Comber, four at The Ritz-Carlton, Grand Cayman, and one a piece at Renaissance, Pinnacle, South bay Beach Club, Laguna del Mar, Casa Caribe, Sovereign and the Commonwealth, three at the Meridian and four at Avalon.
Opportunities still remain for overseas buyers and residents to purchase a property on Seven Mile Beach, but realistically I believe that the chance to buy at under US$1 million in this area of Grand Cayman is quickly drying up. During the traditionally high winter season, I predict some people will be wishing they had purchased when prices were still under US$1 million. To avoid missing the boat, I believe that now, more than ever, is a great time to purchase your dream property.
Wishing you all the best for a prosperous and happy New Year.