There is an underlying disdain currently being expressed globally, especially within North America and Europe, with regard to the way they are being taxed, with rising taxes choking investment choices and stifling growth. Such pressures have encouraged investors to look for better ways to seek investment returns.
While the high net worth individual has generally had more flexibility in their investment choices and many have already incorporated Cayman real estate in their wealth management portfolio, the middle income American & European is just waking to the possibilities that this jurisdiction offers them in terms of growing their wealth.
High net worth individuals have long since appreciated the benefits that investing in Cayman Islands real estate has had to offer. Cayman’s tax neutral status (no annual property taxes, capital gains or inheritance taxes) along with its safe and secure environment, professional work force and glorious climate, not to mention one of the world’s top beaches, have all been major attractions for some of the World’s most wealthy people, enjoying all the benefits our island has to offer while watching their investment grow.
While the US real estate market is clawing its way back after hitting rock bottom in the past couple years, Cayman’s property prices have remained fairly stable, sound investment for an investor looking for stability. While we have seen a decline in the total number of sales along Seven Mile Beach, it is interesting to note that prices of larger homes and condominiums, both along Seven Mile Beach and other areas in Cayman have been increasing in the past couple years, indicating a large wave of high net worth investors that have already purchased their piece of paradise here in Cayman, with more investment taking place in the US$2 million plus property market in the last six to 12 months than over the last five years prior to that period, since the sales of the last new ultra-high end development – WatersEdge.
This push to purchase in Cayman’s high end market serves to demonstrate that wealthy people have made the decision to invest in Cayman in a big way, happy to place their trust in a stable and secure environment that offers a higher class of product that is more in tune and therefore more acceptable to North American and European requirements. The fact that The Ritz-Carlton has recently withdrawn from Jamaica’s Rose Hall resort says a good deal about the importance of ensuring the right location for investment of any kind, high end or not.
Seven Mile Beach, Condo’s Sold (Figure 1)
New possibilities for middle income Americans
Happily, the US economy seems to be on an upward trajectory right now, which means that another sector of the investment market now seeing their financial position improve is finally in a position to eye attractive investment propositions such as property in the Cayman Islands.
Those individuals looking to invest in the US$500,000 to US$1.5 million who previously were hit by property devaluation in the US, reduction in their 401k savings plans, job tightening and banks refusing to lend are now able to appreciate what high net worth individuals have known for a while – that the Cayman Islands is an excellent location in which they can share their investment with their family and friends and get true benefit from their wealth.
Assets are now appreciating as the stock markets surge ahead, the American housing market is turning around and showing real signs of promise and fewer people are now underwater in the property market, a continuing trend. As a result, we are already seeing an increase in interest in property in this price range and I only see interest in this segment of the market increasing.
In particular, Cayman’s ocean and water front condominium market is set to see significant improvement in the coming months, as more and more Americans begin to seek out their own slice of heaven here in the Cayman Islands. With planned inventory for this sector coming on the market within the next two to three years, this sector is ripe for investment.