The demand for waterfront property in Cayman has been so significant that there are few properties left, creating a sellers' market.
New paradigm for inventory
A few years ago the MLS (Multiple Listing System/Cayman Islands Real Estate Brokers Association-CIREBA) members listed the total number of inventory (properties and land) for sale at around 2,200. Today, as at the time of writing (end of September) that figure has decreased dramatically to 1,572. This drop of approximately 30 per cent alone is a huge indicator of how the market has changed in recent years. We have gone from a high amount of inventory to a considerable drop, which will in turn drive up prices further, I believe, as there will be less choice for buyers, inevitably resulting in a sellers’ market.
The two locations in Grand Cayman in particular where a sellers’ market can already be seen are along the Seven Mile Beach corridor and canal front lots, where the inventory has all but dried up in the former and to a certain degree in the latter. This has resulted in buyers having now to go further afield when looking for their ideal property.
In addition, I have seen a great deal of absorption of inland condos. In my opinion, this heightened activity is a result of two factors. The first relates to the fact that long term residents have now been given long term stability with permanent residency, or have achieved job security for the long term. This in turn means they are more inclined to settle in Cayman and purchase property. Secondly, we are seeing an upsurge on the number of people from overseas who are semi-retired or who can work remotely seeking to relocate to the Cayman Islands with their families.
This has had an unfortunate knock-on effect as it’s is already creating infrastructure issues as far as schooling is concerned, with huge pressure on private schools to admit new students and long waiting lists a frustration for parents. In some cases, this may delay the family relocating to the islands, until the schools are able to accommodate the children.
On the flip side, I still see the $2 million plus area of the residential home market as remaining a difficult one for buyers to sell their properties in the short term. These properties are not moving anywhere near to the degree of other inventory. Going forward, however, I see this becoming less of an issue. This is because desirable parcels of land are becoming increasingly less available. With prized parcels of land few and far between, prospective buyers will be looking at existing properties, which will in turn become increasingly more desirable. For example, there is only one beachfront parcel of land available at the highly sought-after location of Cayman Kai and that is being listed at a 15 per cent premium.
I believe as a result there will be a shift in the coming months and properties in the $2.5 million region will become a lot more appealing, especially as buyers then don’t have to go through the headache of building and incur building costs which are currently on the increase.
To emphasize my point, compare the average time on the market for residential homes – in 2014 that number of days average was 531. In 2015 (year to date) that figure was just less than 300. This is a quantum leap as far as selling property is concerned. Years gone by condominium properties stayed on the market sometimes in excess of a year. Now the average has dropped to six months and less. Property is moving quicker because the appetite for Cayman real estate is growing as the supply is dwindling. This means if you see a property you like, my advice is to move quickly before it’s gone.