As we move into the 2nd quarter of the year, I thought I’d take this opportunity to provide a recap of the Cayman Islands real estate market for Q1 2025 with respect to volume, transactions, inventory, and overall pricing as well as provide some insight as to where I believe our market will be heading throughout the year.
Please note that all figures included in this article are taken from CIREBA and are quoted in US dollars.
A look at sold transactions and volume
In Q1 2025, the total number of sold transactions was 200, down from 237 in Q1 2024 (15.6% decrease) but up from 195 in Q4 2024 (2.5% increase).
With respect to volume, Q1 2025 saw $274.8M in sales, down from $305.1M in Q1 2024 (10% decrease) but up from $226.3 in Q4 2024 (21.5% increase).
It is key to note that Q1 2024 is impacted by what I call “the Lakeside effect”. Towards the end of 2023, the Bovell Team listed 73 units at Lakeside, which represented 5% of all listings that year. 41 (56% of 73) of those closed in Q1 2025, which accounts for 20% of all sales during that time. This amounts to $13M in sold volume (5%) which obviously impacts the sold volume during this period.
In March 2025 alone, 85 listings went sold amounting to over $108M in sales volume, a figure which hasn’t been hit since May 2024.
In my 2024 market report I mentioned that foreign market activity picking up towards the end of the year as we had more and more enquires after the US elections. This continued into January where we started to receive offers at the higher end of the market especially in the Seven Mile Beach area. As we moved into March a number of those transactions closed; a trend which should continue further into the year.
New listings
When you look at new listings, we saw a total of 521 new listings in Q1 2025. This number increased from 453 in Q1 2024 (15% increase) and increased from 341 in Q4 2024 (52.7% increase).
With respect to the value of these new listings, Q1 2025 saw $949.4M, which is up from $796.2M in Q1 2024 (19.2% increase) and in Q4 2024, the value of new listings was $632.5M (50% increase).
Average price per listing – solds and new listings
In Q1 2025, the average price per sold listing was $1.374M compared to $1.287M in Q1 2024 (6.8% increase). In Q4 2024 the average price per sold listing was $1.160M (18.4% increase). Overall, sale prices continue to rise quarter-over-quarter. This will be impacted even further when several developments at the higher end of the market will officially move to sold later in the year.
In Q1 2025, the average price per new listing was $1.822M compared to $1.757M in Q1 2024 (3.7% increase). In Q4 2024 the average price per new listing was $1.855M (1.7% decrease). It’s important to remember that our market is relatively small and several units at the lower end of the market or only one or two at the higher end of the market can substantially impact overall numbers.
Inventory is up
The average monthly number of active listings at the end of Q1 2025 was 1,895 compared to 1,846 in Q4 2024 (2.6% increase).
As of writing this article, there are currently 1,932 active listings of which 365 are pending and 232 are pending/conditional which means only 1,335 are available for sale.
Yes, while there is a slight increase in inventory quarter-over-quarter, the population is also growing. From experience, we know that many newcomers to Cayman initially rent before eventually purchasing property.
The value of existing inventory
Not surprisingly the value of the active listings in the marketplace has continued to rise. In December 2022, the value of active listing inventory hit $3 billion for the first time in our industry’s history. Ever since then this number has been climbing higher and higher and increased to over $3.6 billion in March 2025.
The future of real estate in the Cayman Islands
The more things change, the more things stay the same with respect to real estate in the Cayman Islands.
Cayman real estate is highly attractive due to its stable economy, tax benefits, and stunning natural beauty. With no direct taxes like income or capital gains tax, it offers a favorable environment for both investors and residents.
Cayman has also become an emerging mecca for the UHNWIs (ultra-high net worth individuals) due to the Cayman Islands’ Economic Substance Law which mandates that certain entities operating in Cayman must demonstrate they are conducting core income-generating activities within the jurisdiction, be directed and managed there, and have adequate physical presence, expenditure, and personnel. This law came into effect in 2019.
The islands’ location, world-class beaches, vibrant culture, people, and strong real estate market make it an ideal destination for those seeking a luxurious lifestyle or a solid investment opportunity.
Tariffs on…tariffs off
US Census Bureau Data shows that 80% of all goods imported in 2024 came from the United States. This impacts almost everything our islands buy from groceries to construction materials.
Tariffs can impact the housing market by increasing construction costs, as imported materials such as lumber, steel, and appliances become more expensive. These higher costs can lead to increased home prices, making it more difficult for potential buyers to afford new homes. As construction costs go up, this makes existing properties more price competitive and more appealing.
Not surprisingly, tariffs have a substantial impact on building developers. Given the development timeline can be anywhere between two and seven years from initial planning through final construction, these new charges, and often unplanned costs, can amount to millions of dollars especially in larger and more luxurious developments such as Aqua Bay or Lacovia.
Additionally, the uncertainty surrounding tariffs has become extremely challenging when planning future developments. How can developers set prices for buyers when one day the tariffs are on and the next day there are off?
The impact of the tariff policies of the United States has impacted the entire globe and will most likely impact real estate and especially new construction in the Cayman Islands.
Interest rates
Interest rates in the Cayman Islands are pegged to US interest rates.
As of April 9, 2025, the US Federal Reserve has maintained interest rates at 4.25% to 4.5%. US interest rate forecasts have been affected by recent economic developments, including the new tariffs. Initially, traders expected several rate cuts from the Federal Reserve throughout 2025. However, these new tariff measures have prompted a reassessment, with traders now predicting the Fed will start rate cuts in June, totaling three 25-basis-point reductions (75 basis points) by year’s end.
In comparison, as of April 9, 2025, the Bank of Canada has reduced its key interest rate to 2.75%, following a 25-basis point cut on March 12, 2025. This marks the sixth consecutive rate reduction, aimed at stimulating economic activity amid global uncertainties.
Crystal ball
I think everyone would agree that you’d need more than a crystal ball to figure out what’s going to happen next with respect to the global economy.
But I think it’s important to remember a few key facts. Real estate in the Cayman Islands has always been a good investment. It is a fixed asset you can live in or rent out unlike stocks or other investments. The fact that Cayman doesn’t charge owners with annual property tax is a huge upside not only with locals, but also with foreign investors.
When the US economy faced a major crisis in 2007 and 2008, the housing bubble burst in the US. Although we felt a downside in Cayman real estate, there was no housing bubble burst. Transactions slowed down but the overall value of real estate in the Cayman Islands did not substantially decrease unlike the US. It is important to reference this because it shows that our market remains resilient even in the most serious economic situations.
When buying or selling property especially in an ever-changing market, it’s essential to work with trusted experts who has years of experience in the field. If you have any questions about buying, selling, or anything related to real estate in the Cayman Islands, feel free to contact the Bovell Team at +1 345 945 4000.