Increase in activity; prices also increasing
The right move
The Cayman Islands have seen important changes to its political leadership in recent days, with the ousting of former Premier McKeeva Bush and the instatement of the new Premier Juliana O’Connor-Connolly. Bush was removed following a vote of no confidence after his arrest with regard to fraud allegations, including the misuse of a credit card. I believe that this is the right course of action for Cayman: when someone is in such a high position of office it is essential that they are not perceived as “above the law”. The ousting will be viewed as a good thing in time as it shows Cayman is ensuring it is keeping its own house in order.
Stamp Duty rises
With the exception of first-time Caymanian buyers, all other buyers of property in the Cayman Islands – local or from overseas – will now have to pay a flat rate of 7.5% stamp duty, an increase of 3.5% for Caymanians and 1.5% for non-Caymanians. In my view this will perhaps make it a little harder for buyers to justify their purchase, however those taking a long-term view of their investment will be able to spread the cost over the extended period of their investment. Foreign nationals will obviously be impacted to a lesser extent than locals and I believe that the increase will only really be felt at the higher end of the market.
Market overview
That said, 2013 is already showing heightened activity, particularly at the high end. We start the new year with a large number of properties that are pending closing, currently standing at 145 (as per Cayman Islands Real Estate Brokers Association statistics) as at the 24th December 2012. This figure is a marked increase of 42.16% over the same time last year, when there were 102 properties pending. The statistics are also revealing that prices are increasing, particularly in the higher end of the market, where we are seeing signs of significant movement as we move into the busy season.
As at 24th December 2011 the average cost of a condo on CIREBA’s books was $808,497. By the same time period this year that figure had increased by 4.79% to $847,204. Analysing these figures further, the lower end of the market (one bed condos) has seen a drop in price. At the end of 2011 the average price was $245,411, with that figure dropping by 3.56% to $236,972 at the end of 2012. However, when you look at the higher end of the scale you will note a marked increase in price, with four bed-plus condos averaging out at $2,796,946 as at the end of this year, compared to $1,877,143 last year, a stellar increase of 49%. Four bed-plus residential properties have also seen signs of price increases, from $2,160,125 in 2011 to $2,287,024 in 2012, an increase of 5.87%.
Development Update – WaterColours wins International Property Award
On December 7th over 100 countries were represented at the prestigious International Property Awards 2012 in London, England, where a select number of property professionals were awarded for their excellence. The long established awards are recognized as a symbol of distinction throughout the competitive global property industry. With over 2000 International entries meticulously reviewed by a panel of 60 judges worldwide, The WaterColours and the Cayman Islands had the great honour of being awarded for outstanding achievements in the categories of; Best Development Multiple Units in the Caribbean and the Cayman Islands, as well as being granted a five star designation.
One of the most prestigious developments of high end properties on Seven Mile Beach, The WaterColours has seen approximately 65% of units sold this past year. In December 2012 alone we were predicting total closings on this impressive development to top over $25 million, making The WaterColours project one of the most successful in our history, with total sales topping a quarter of a billion dollars so far.
2013 will see a concentrated effort to complete finishing the interiors of each of the 60 magnificent WaterColours residences, which will be the final area of construction focus over a ten-to-eleven month period. Studwork has already been completed on three-to-four floors up, along with sheet rock construction for the first floor.
By the time it is completed, on schedule for the first quarter of 2014 barring any unforeseen circumstances, I believe this collection of residences will be unlike any other in Cayman. As a result, there will be a price increase of 5% in The WaterColours properties, as at 15th January 2013, with a further price increase likely later on in the year. I am delighted to see how quickly this unique project is taking shape.
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