Real estate issues: The question of setbacks & the issue of valuations

Seven Mile Beach condos

This time of year is always a good time to compare statistics, in order to give a feel of where the market is heading for the year ahead and beyond. I have concentrated my study in the condo and homes around the US$1.5 to US$3 million market. Looking at the statistics as they relate to condos on Seven Mile Beach, we see that 43 beachfront condos were sold in 2018 (according to statistics provided by the Cayman Islands Real Estate Brokers Association – CIREBA). This figure compares with 28 sold in 2019.

The fact that the figure dropped quite considerably in 2018 I believe actually gives a poor impression of the market on Seven Mile Beach. This is principally due to the fact that there is little inventory available, and that which is coming to the market is doing so at an increased price point, and as such, this changes the transaction numbers considerably. Also, these figures do not include pre-construction properties that have been sold. If these were included it would bring the figure far beyond the 2018’s figure of 43.

I honestly feel the market on Seven Mile will continue to be strong and looking ahead, I believe prices will continue to rise as availability becomes even scarcer, even with the advent of the new luxury WaterMark and Lacovia properties. What does this say as far as foreign investment in the Seven Mile Beach market is concerned? It says this market is very solid. I would tell any prospective buyers that they should not be deterred from entering this market in this current environment because they will lose out if they don’t. History has shown that a number of people could have prevented themselves from missing out on the opportunity, if only they had acted swiftly. Now is not the time to sit on the fence; it is a time to act.

Luxury homes in the Cayman Islands

Looking at the statistics as they relate to homes between the US$1.5 to US$3 million mark, it is interesting to note we see the opposite trend, with 24 homes sold in 2018, versus 45 homes sold in 2019.

This has been driven, in a large part, due to the fact that people are seeing value in existing structures and that they are been obtained at an appropriate price on which people are prepared to act. In the past, people looking to own a home in the luxury-end of the market have been prepared to build; however increasingly more people are now willing to purchase an existing home, due to factors such as land costs, construction costs, the availability of desirable parcels and the time and effort involved in building. Buyers have therefore been receptive to purchasing instead.

In addition, the number of people has increased who are looking to move to the Cayman Islands, looking to invest somewhere offshore in a beautiful property in which to reside with their family full-time. An increase in residency applications associated with such purchases has helped this sector of the market, one which, historically, has been a difficult sell. Offering the means by which people can reside here part of the year has meant an increase in numbers of people coming to Cayman to enjoy the wonderful lifestyle with which we all are blessed. The good news is that there are still opportunities within this market place that are good value in great locations, such as Canal Point, Crystal Harbour, the Yacht Club and Grand Harbour.

Boiling down the statistics, I would say the most important message is that if you feel inclined to purchase a property, it is most important to act or you will miss out, as prices continue to go up while inventory goes down. The time is right.

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