Real Estate Market Insights 2021
- Cayman Islands real estate market is robust and attractive as the country continues to be one of the safest places in the world
- Real estate and the finance sectors are expected to be major drivers in Cayman economy
- Suburban and low-density residential areas are becoming more popular with new buyers
After a year of struggling with the debilitating impacts of the COVID-19 pandemic, it has become obvious that a country’s overall economy, to this point, is largely determined by how it has responded – and abated – the spread of the virus within its borders.
With its timely “safety first” response in closing its borders and efficient rollout of vaccines as soon as they were available, the Cayman Islands is currently ranked among the countries with the lowest-risk according to the Center for Disease Control and Protection and is reported to rank 5th globally in the CNN Health COVID-19 Global Vaccination Trackers.
Last August 9, the country entered the second of its six-phase reopening plan with reduced repatriation restrictions, hopefully leading to a successful implantation of Phase 3 in September – the limited introduction of tourism once the vaccination rate hits 80 per cent.
For those in the real estate industry, the question remains on how COVID-19 has and will continue to affect the demand and use of properties on the market.
“The pandemic has been an equalizer,” observed a PWC-ULI report on emerging trends in real estate for 2021. “Our focus is on identifying the markets that will lead in the next normal.”
Real estate continues to drive Cayman economy
In its economic and financial forecasts for 2022-2024, the Cayman government reveals its confidence that operating revenues over this period will continue to be driven by the strong performance of both the financial services sector and the local real estate market, as well as the projected full reopening of borders to stayover tourism in first quarter 2022.
As of August 2021, CIREBA reported a total of 1,446 available properties amounting to over US $2-billion on their Multiple Listing Service (MLS), in addition to 3,441 properties still pending as of this writing.
Year-to-date figures also revealed a whopping US $687,519,633.54 in sales, representing 669 properties of various types – a sure indicator that the real estate sector remains robust and continues to be one of the dominant contributors to the national economy.
What type of property are people buying?
What types of Cayman property are buyers most interested in acquiring at the moment? “Everything really,” observes ERA Cayman Islands broker and six-term CIREBA president Jeanette Totten. “Some of the very wealthy are buying expensive condominiums or luxury homes by the ocean. Meanwhile, others are buying properties to rent out. Homes under US $1-million sell very quickly.”
Expectedly, residential properties make up the lion’s share of active listings for August, with condominiums leading the pack at 806 units at an average list price of US $1,291,002.45. On the other hand, single family homes make up roughly 10% of the residential listing at 173 units, but are looking at prices playing around US $3,251,774.46 on the average.
After a year of struggling with the pandemic, safety has practically displaced location as the top priority for buyers. And to some extent, functionality as well. Living through lockdowns and work-from-home set ups continue to shape the tastes and preferences of home buyers, seeking living spaces where they can not only dwell comfortably, but also work and play at the same time. This could mean bigger backyards, more flexible floor planning, more square footage, and closer proximity to natural, outdoor spaces following trends that experts have called “adaptive living.”
In its recent report, CIREBA shared its active listing by property type, their average list price, and average market time as follows:
Active Listing For Property Type Wise On Saturday, August 7,2021
|Property Type||#Active||Avg List Price||Avg Market Time|
As far as land is concerned, it is not surprising that in August, only eight properties remain listed in the beach/ hotel/ tourism areas, where real estate development remained unabated despite the pandemic. The demand is such that these properties carry a whopping average list price of US $14,945,982.08.
Where are the most popular areas to buy?
Ten residential properties were sold by the middle of August 2021 — comprised of three family homes, one semi-detached unit in Bodden Town (considered Grand Cayman’s fastest growing district in terms of resident population), and six condominium units in Prospect, South Sound, and West Bay Beach (South). Combined sales were pegged at a median sale price of US $887,217.50, representing 97% of their average list price. Interestingly, all these locations are quiet residential neighborhoods that are close to the water, but are comparatively more laidback than the popular enclaves such as George Town and Seven Mile Beach.
Preference for suburban markets and low-density areas has become an observable trend worldwide over the last year. In Cayman alone, reports indicate that homes and residential land on Cayman Brac and Little Cayman are being bought up at an unprecedented rate since the pandemic began. With a dwindling inventory in Grand Cayman, residential buyers and property investors have started buying up lots and homes in the sister islands in “unprecedented rates” especially since restrictions on travel between the islands were lifted last summer.
Who are buying?
Most buyers come from North America but there has also been an upsurge of interest from European clients as well. If the pandemic had an impact on Cayman real estate, it has been generally a positive one. As Jeanette observed: “Many people have decided to move to Cayman because it’s known to be a safe haven. They buy homes and put their children in school here.”
“The positive trends in the real estate market will continue with overseas buyers looking at either investment properties that they will either rent out or for homes they can move to the island and live in,” she opines. “Local clients are buying mid-range and low-end properties with the idea that once the island opens up, they will be able to rent them to workers coming back on the island.”
What should buyers look for when investing in real property?
Being an industry expert of four decades and counting, Jeanette likes to keep it simple and to the point when advising clients, both local and foreign, who are looking to acquire property in the Cayman Islands.
“First of all, I ask them to decide what is important to them,” she relates. “For instance, do they have children attending school? Do they want a canal which would allow them to have their boat in their backyard or do they want only beachfront? The more we as realtors know what is important to our customers, the better we can point them in the right direction.”