Good real estate news heading into lucrative winter season
As published in the Caymanian Compass, 7 November, 2012 http://www.compasscayman.com/caycompass/2012/11/07/Good-real-estate-news-heading-into-lucrative-winter-season/
Quarterly statistical round up
Latest statistics from the Cayman Islands Real Estate Brokers Association (CIREBA) indicate that the high end property market is looking vibrant and positive as we head into the traditional winter high season. Looking at the statistics over the last year (to the end of September) the total number of properties and value of these is actually down by 16% versus the end of September 2011 figures. However, we should note that the number of pending sales is up considerably, up a huge 94%. This pending figure includes over $26 million in actual sales of pre-construction condos which will not be reported as sold by CIREBA until the building is completed. Also included in the pending statistics are other large waterfront properties valued at over $30million. Sales in large residential homes have also increased, year-on-year, with 40 homes with four or more bedrooms sold as at the end of September 2012 versus 35 as at end September 2011. The average sale price for such properties also increased 20% from September 2011 ($ 1,241,487) to September 2012 ($1,492,147). These are positive indicators of a market that is gearing up to enjoy a busy high season ahead.
Seven Mile Beach Developments show Investors’ confidence
In continued support of positive market trends, there have been other recent real estate business developments along the Seven Mile Beach corridor.
Take a drive along the Esterley Tibbetts Highway and one can see that work has begun on the demolition and renovation of sections of the old Hyatt. Owners have revealed that construction of a new four star business hotel with conference facilities is in the works. The brand of this new hotel has not yet been revealed, however the owners have indicated that there may also be new residential offerings, as well as investment in the golf course. This is a good sign of investors’ confidence in the Cayman Islands.
Two live auctions of The Ritz-Carlton, Grand Cayman properties were held over the past two weeks. The first on 18th October, presented by RE/MAX Cayman Islands resulted in the sale of two of the three Ritz Residences for auction, with the third now in negotiations. The second larger auction of The Ritz-Carlton Hotel buildings resulted in the purchase of the property by RC Cayman Holdings LLC an affiliate of US based Five Mile Capital Partners LLC, the property’s secured lenders, for the US$177.5 million reserve price at the 30th Oct auction. These sales can have only positive implications with further investment earmarked for the hotel and once again show investors’ confidence.
Impact of US presidential election
While all eyes may be currently turned towards America right now as the United States prepares to vote for its president, I believe the ramifications for the Cayman Islands real estate industry of who becomes president are positive, whichever way the US votes.
If President Obama gets re-elected I think there is the potential for a considerable amount of activity as people with means look to protect their assets offshore, a continuation of a steady stream that has taken place in the last three to four years. On the other side, if Mitt Romney is voted president, the increased confidence and stability for people with means will result in more investment, as investors realise the potential of diversifying their portfolio in a manner that allows them to derive great pleasure from their investment via a luxury beachfront property in the Cayman Islands.
Through the general global economic turmoil over the past few years Cayman has remained a stable and attractive place in which to invest. A recent increase in activity in the higher end of the market – with some extremely luxurious residences either closing recently or scheduled to close – seems to suggest that those people in North America seeking to reduce their risk from the present administration have realised the benefits of investing in such a stable and attractive location as ours. Such a realization is now manifesting itself in an upward swing for the high end of the market.
Cayman a top choice for investors
Cayman has been the number one choice jurisdiction for overseas investors over its Caribbean competitors for a number of fundamental reasons, including our proximity to the US and therefore the ease by which Americans can travel here, the excellent infrastructure especially communications, the safety and security which we enjoy, the diverse entertainment, the exceptional dining and more.
For these reasons, I believe that our leaders should recognise that retaining these unique selling points is of paramount importance and should never be underestimated. The Cayman Islands Government needs to realise that news travels very quickly to a global audience and that their words can have impacts far beyond the statements themselves, with deep ramifications for the country and our real estate market. The real estate industry is linked to all other facets of industry, such as the financial services industry and the mantra in that particular industry rings just as true for the real estate industry: reputation and stability is everything.