When opportunity knocks…time is of the essence and timing is everything, all these phrases epitomise the current timing of the real estate market in the Cayman Islands.
The market here, as a whole, has seen a decline in activity over 2009 and 2010. The pricing has also suffered; Predominantly this has affected the local market more than the international or prime market. The primary reason for this is that the local market is more affected on a day to day basis by the economy and so naturally has responded to how individuals have been affected in their daily and working lives.
The foreign market on the other hand is very different. This market has always been a primarily cash based investment, generally a second home market for wealthy customers who have the luxury and the benefit of being able to buy and do not have financing cost, or ongoing cost that would force them into reacting to the changing market place. What normally happens is that the activity slows down so the number of buyers is reduced.
Cayman’s history of real estate over the past 30 plus years was characterised by a market place that has been essentially strong, consistent and stable with good appreciation. However, with the pressure of the global economy we too have also had pressure applied to our market and thus now find ourselves in a situation where Caymans market is primed for true opportunity and some real long term appreciation as prices have never been better. Availability is good and in some areas there is more choice, which means the pricing is also more attractive.
The fundamentals of what makes Cayman such a good, stable market are still as true today as they have ever been. From a location stand point, Cayman is in an exceptional location just 480 miles south of Miami, which is one of the largest hubs in the world. We are also easily accessible with direct flights going through the Bahamas to London, or via Jamaica. As a vacation spot the Cayman Islands is also especially good, due in large part to the safety aspect. The ability to do business due to its financial services has also been a back bone of Cayman’s strength and growth over the years.
Part of the reason for such a strong local real estate market is that Cayman has drawn some of the best professionals in the world for many reasons. Lifestyle is one of them, but another key factor for investors, tourist and local residents is our low crime rate. We have our problems just like many other places. But it is still today a very safe, friendly and warm environment. A further factor is our political stability which has also proven to be very good and very strong over the years and it will continue to be that way.
A major plus over the rest of the world is that Cayman has a “one time only” property stamp duty (purchase tax), whereby you pay at the time of purchase only; there is no annual property or sales taxes, inheritance or death tax.
These are the primary things that attract the buyers looking for a place in the Caribbean. Although Cayman’s market activity has been slow through 2010, and down in 2009, we have seen an increase in activity in the later part of 2010, as the number of enquiries has gone up leading to an increasing number of offers; as this continues we will see the benefit of this activity in the prices hardening and going up over time.
We have also found that the foreign market has started to return as they’re starting to see that Cayman is now the perfect place to buy. With the indicators saying that 2011 is going to be a better year and could be major turning point, Cayman’s development is still moving forward. There are numerous projects that are still being completed that are certain to enhance the tourism product and infrastructure.
For example, the new George Town dock and cruise ship berthing facilities, which have the potential of introducing future overnight stays and the development of a 2000-bed hospital, large scale medical tourism facility, medical school and assisted-living senior’s residence. The continued forward movement, development and commitment of Camana Bay which will be starting a new commercial building in the first half of 2011, along with the construction launch of the first residential product for sale.
In addition to this we have the continued construction of the Watercolours Development which is the newest and greatest luxury condominium development on Seven Mile Beach. The completion of Sea Breeze to the north end of Seven Mile Beach saw an opportunity for buyers who don’t have the patience to wait for 30 months or until the end of 2013, and would like to get into a new construction at this stage.
Government is also doing its part with the private sector to work toward stimulating the real estate environment as a whole. In addition government has started to improve immigration policies to encourage new foreign businesses to relocate to our shores.
Cayman has so much to offer and there has never been a better time to buy, especially when buyers and investors want to get in at the bottom. NOW is the time…CAYMAN IS THE PLACE!