July 2013 Market Update


US market outlook

The latest Housing Report produced by RE/MAX in the US makes for very encouraging reading. In May, both US home sales and home prices rose at double digit rates above levels seen in May last year with sales increasing by 11.6% and the Median Price up by 10.8%. This means that May marked the fourth month in a row that home sales and prices have risen higher than the previous month and higher than the same month last year. The RE/MAX Housing report states that this suggests that the housing recovery that began early last year is gaining momentum in 2013 in the US.

Cayman view

These US statistics are very important for our market. Historically the Cayman property market has lagged about six months behind the American market but in some aspects our market has actually leapt ahead, especially in the higher end. While sales volumes in Cayman declined in the past couple of years following the US, Cayman never saw the drastic drop in prices as in the US. I believe we are now entering a crucial time for Cayman’s market – especially the Seven Mile Beach corridor with regard to properties values at $2 million and under.

While sales in Cayman have not been as positive as the US, with sales volume of Residential and Condominium properties combined, down in the first quarter by 13%, CIREBA shows sales in the second quarter up by 15% versus the same period last year.

Cayman Islands Residential and Condominium Sales (US$)
as reported by CIREBA
  Q1 Q2 Q1+Q2
2012 $47,860,400  $49,687,300  $97,547,700
2013 $41,642,292   $57,382,374 $99,024,666
  -13% +15% +2%

At RE/MAX, sales year to date (January – May) have been incredibly encouraging with Total Volume up 36% versus same period last year.

RE/MAX Cayman Islands Sales Volume
Jan – May 2013
  US$  % Chg
Listing Side Volume $60,322,756 +25.50%
Selling Side Volume $49,307,092 +50.20%
Total Volume $ 109,629,848 +35.50%

I believe that these trends mean that North Americans are beginning to look again at purchasing vacation property and this is perfect timing for Cayman’s 2013/14 high season. I’m optimistic that we will see a marked improvement in this sector of the market as vacationers with the wherewithal to purchase vacation homes begin to turn their dreams into reality.

Local viewpoint: Infrastructure issues

While the new Dart extension to the West Bay Road bypass is certainly a beautiful new road that is extremely well constructed, tastefully landscaped and a dream on which to drive, I do have some concerns I would like to air.

The ensuing bottleneck at the Britannia roundabout that has been created following the construction of the new aspect of the Bypass is a cause for concern. Now that commuters into George Town are able to exit West Bay far easier than before, they are also getting to the end of the new bypass a great deal quicker. This means a traffic jam into George Town beginning at the Britannia roundabout. No one likes traffic jams, but the fact that it is right smack in the heart of the Seven Mile Beach area makes it even worse. The sooner the Government can tackle this crucial aspect of infrastructural development the better, because tourists and visitors getting caught up in congestion is not an excellent way to “sell” the Cayman Islands, quite apart from the inconvenience it causes to residents.

The road is also scheduled to open up further into West Bay – joining Willie Farrington Road and also connecting with Batabano Road to the West of The Shores development. As soon as the road is completed in these sections of West Bay I believe that residents will see an upswing in interest and value of their property, as prospective buyers realise the convenience of purchasing a home in these locations. The development of the Public Beach by Dart has come a long way and is taking shape nicely. The broadening of the sandy beach area, creation of excellent parking and additional facilities will be welcome improvements for locals and tourists enjoying Seven Mile Beach.

It is relief to see the progress on the Shetty hospital complex development. If you take a drive out to East End you will see the first glimpse of this brand new development from the ocean-front, an excellent example of economic diversification and expansion into districts other than George Town and into one of the most scenic parts of the island.

With regard to the Port development project, it is encouraging to note that the new Tourism Minister Moses Kirkconnell has undertaken the task of tendering the project in the appropriate manner. This is the right thing to do but the project is imperative to Cayman’s future and action needs to be taken swiftly. The country cannot afford further delay.

The George Town Landfill site is perhaps one of the most important infrastructure items on the Government’s agenda, in my view. For a country to be thought of as a first world nation and doing well, it must be able to manage its own waste.

The current dump has to be moved out of George Town. This is an extremely pressing issue for us all because every day there is a delay in making a decision the landfill continues to leech into the surrounding land and continues to be a visual hazard, as well as often causing a terrible odor. The impact of this growing monstrosity is broad, affecting residents, George Town workers and tourists alike. With cruise tourists glimpsing the landfill before any other aspect of this beautiful island, what does it say about a country if it is apparent it cannot control its waste?

I’m surprised by Bodden Town’s absolute objection to having the new facility reside in this district, especially given the proposal of a very sophisticated waste management system with non elevated mounds etc. Why not embrace the project and use it to the district’s advantage? Use the project as leverage to propose compensation such as additional Government funding for community needs, or an additional seat in Parliament? Ask for the development of an industrial area around the facility which would hide it from view and also create business for the district. Bodden Town could be the guardian of this project which is vital to Cayman’s ongoing development.

We have some serious questions to answer regarding the Dump: what does this now mean for Cayman? Will the landfill be relocated? If so, to where? And what will happen to the existing facility? Will it be dismantled? We are keen to promote the islands as having a green environment. Let’s start with sorting out the waste disposal issue right now. 

To see what properties are available in our vast inventory of excellent quality properties on island, please visit my website: www.dreamfinders.com