Time is right for movement of high end family homes
Following our analysis in the previous two months of the types of properties available on the Seven Mile Beach corridor, split by price range, this month I want to focus on high end single residential property and why I believe right now the environment is conducive for us to see greater movement in this area of the market.
Over the past six years we have seen a marked upswing in the number of condominiums priced at $3 million or over, while the sale of high end single family homes of similar value has been more static.
The graph shows that while 2012 was a particularly good year for the sale of high end single residential properties, in general the movement has been slow, particularly when you compare the statistics (courtesy of the Cayman Islands Real Estate Brokers Association) with the sales of similarly priced condos. It should be noted that the dates of the condo sales are their pending dates (at the point of contract) rather than the point of possession due to pre-construction. This is because the majority of sales of $3 million and above condos have been for the brand new WaterColours development on Seven Mile Beach and I feel it’s important to reflect the actual activity in each year, rather than the possession date, when all the property transactions closed at the similar time. As the graph shows, 2014 was a very important year for sales of WaterColours condominiums, with nine out of the total 14 sales being WaterColours sales.
Key drivers
At the moment there are a number of extremely attractive homes on the market at the $3 million and above price bracket which have been built over the last few years and this niche in the market is continuing to grow, with more construction taking place here in Cayman than we have seen in the past 10 to 15 years. Ultimately this offers buyers more choice in the marketplace, along with homes that are better constructed and which have been designed with new technologies, products and energy efficiency, all of which is being utilised in the construction of new homes. In my opinion, whether a buyer chooses to purchase a condo or a home really comes down to availability and the choice now is definitely expanding.
Another key driver to this segment of the market has been an upswing in interest by wealthy investors looking to purchase a second home in a destination such as the Cayman Islands. The number of people prepared to invest in a home away from home is on the rise, as they look to diversify their portfolios while gaining a second place of residency and invest in a wonderful Cayman Islands asset which can be enjoyed by themselves and their families for years to come.
Rising prices
On another point of note, so far, to date, we have seen sales of residential homes move up to a high of just under $680 per square foot, which is a record high as far as I can remember, while the sales of condominiums are over $1,000 a square foot. This is naturally excellent news for sellers and the start of a trend which I believe will persist as the market continues to strengthen in this area. Although the statistics do not currently reflect the changing market environment, as residential sales have been well below that of condominiums over the year. I believe they will increase in the years to come, as will condominiums on Seven Mile Beach.
Next month I want to discuss the different influences that affect condo and residential home prices, so please make sure you visit wwwdreamfinders.com to find out more.