No end in sight for Cayman’s property boom

| 15/03/2019 | 63 Comments
Cayman News Service

Photo courtesy of Charterland

(CNS): The steady rise in property prices on Grand Cayman continued its trajectory last year, with a significant jump in the sale price of Seven Mile Beach condos, which had a 35% increase over the average value of similar sales in 2017, according to the current Cayman Property Review by chartered surveyors, Charterland. There was good news, too, for owners of two-bedroom townhouses in the south George Town area, where prices rose 21% over 2017, up from just over CI$200,000 to just under CI$250,000. According to Charterland partner Simon Watson, the real estate boom is particular to the Cayman Islands in the region.

“Generally, nowhere else in the Caribbean has experienced increases in average property values that we are experiencing in the Cayman Islands,” Watson told CNS. “The buoyant local economy is of course helping, but the big increases can be attributed to a healthy US economy.”

Noting the huge impact the US economy has on the health of the Cayman property market, he said, “This is most readily seen in the Seven Mile Beach condominium market, a large percentage of which are purchased by overseas buyers, but also in the more local market due the Cayman economy generally doing well when the US does.”

Land and condominiums in particular saw large increases in average value in 2018, though increases were less for single family homes and for inland properties east of Grand Harbour, Watson noted.

The Property Review found that the total value of the new construction projects approved in 2018 was down 54% on the total value of projects in 2017, from CI$727 million to CI$333 million, though the decrease for applications in the residential sector was down far less (15%).

Breaking this down in response to CNS questions, Watson said that 39% of all residential applications in terms of value were for new apartment developments, 13% were for new single family dwellings, while the remainder can be attributed to additions and alterations to existing buildings.

“Unlike the building boom after Hurricane Ivan in 2005/6, which saw an oversupply of 2-bed townhouses, the new developments are generally well spread across property types and sales prices,” he said.

Last November, the Legislative Assembly passed amendments to the Stamp Duty Law to close a loophole, which will kick in at the end of 2019. Developers use this loophole to help buyers dodge paying duty on buildings and only pay stamp duty on the land on which they develop.

Commenting on this, Watson said, “I think that the new, mid-range condominium market may be adversely affected by the end of the stamp duty assessment on land only for new condominium purchases at the start of next year. This loophole was to be closed in December 2018 but was deferred for a further year after lobbying from condominium developers.”

But generally, is there any sign that the boom will bust? “This is the million dollar question and one which is very much on everyone’s minds. We have now exceeded all previous records in terms of average values and the total value of property transfers in one year and so are in uncharted territory,” he said.

“In my opinion demand is likely to continue in the short- to medium-term, at least, with supply still lagging behind. The main risk to this being a slowdown in the global and, in particular, US economies, to which we would be extremely vulnerable, as we saw following the economic downturn in late 2008,” Watson added.

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Category: Business, Construction, Real Estate

Comments (63)

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  1. Anonymous says:

    Say what you want to about President Trump, but his tax and economic policies have resulted in more expatriates, like me, investing here in the Cayman Islands. A lot more things are happening now – coincidence . . . maybe, but always seems like a Republican President is good for the Cayman Islands – hopefully DJT will get reelected in 2020 and our economy down here will continue to grow.
    As Mr. Watson rightfully pointed out, we basically go with how the US economy goes.

    MAGA – Trump Supporter on Little Cayman

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    • Anonymous says:

      Yea, really good for foreign investors and foreign developers and foreign real estate agents, but Caymanians are now priced out of the market. Young Caymanians can no longer afford land or a first home and the beautiful Cayman Islands are turning into Miami. You and Trump and the idiots in the LA can all go to hell.

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    • Anonymous says:

      7:34, Perhaps you did not notice but things were going good economically in the 5 years before Trump came to power. That was during the Obama administration.

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    • Anonymous says:

      Why do people (like you) assume that a property boom is good for a place, or people? What’s your metric? I just don’t see it. Also, your maga guy is a sick person. He’s okay for the private sector where lying, cheating and racism are a personal choice, but for setting public policy, it’s what used to be called a sin.

      • Anonymous says:

        If you don’t understand how foreign money flowing into and being spent in Cayman is good for everyone living in Cayman then it’s hard to find a starting point to convince you.

    • Anonymous says:

      Dude. That’s just weird. Why you talk like that?

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  2. Anonymous says:

    Garbage Island.
    Cesspit. Cesspool.
    Bio waste piling up on the curbs.
    WBR smells like a dirty toilet.
    Cancer is rampant.

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  3. Anonymous says:

    Cayman Sucks.

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  4. Crab Claw says:

    Wonder if it has anything to do with the invest 500k fast-track citizenship option, why real estate prices are rising so fast.

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  5. Yazz says:

    The only way is up, baby.

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  6. Anonymous says:

    Don’t get stuck bag holding…

    Interest rates around the world are steadily on the uptick, with real countries real estate markets in a slump.

    The banks can’t wait to foreclose on your properties.

    SMB is being pumped because that is what DART is paying to happen. One good hurricane, or environmental assessment on the chess pit that is the dump and this boom is bust.

    Buyer Beware. I wouldn’t touch it with a ten foot pole.

    A cash position is still a position. Fast to move, even faster to fall.

    And I agree that the realtors are more than incompetent and useless in Cayman. Watch your backs.

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    • StopTheCrime says:

      Prices went UP after Hurricane Ivan.

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    • Anonymous says:

      Yeah yeah yeah, blah blah blah. A cash position is still a position…sthu. This sounds like someone who either A. inherited a pile of cash. B. Got lucky and tripped over a pile of cash but never really worked for it. Or C. Has no cash. I vote for C.

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      • Anonymous says:

        Hard working and still can’t afford your mortgage, groceries, car or clothing. That is reality for locals on Grand Cayman.

        Cash is King in the Cayman Islands. Good luck.

        BTW: D

        Educated and knows a pump when I see one.

  7. Anonymous says:

    No end in sight, huh? How about the next major hurricane and people living on a tiny island with no electric and potable water for months on end? The # of for sale signs after Ivan was astonishing ( for years ). Short memories, I guess. How about an over-spending government and bloated civil service looking to close budgets by taxing ONLY expats? That was proposed not very long ago. Another short memory situation. How about a US recession in the near future, like 2020 according to many financial experts? Or when international governments truly target offshore jurisdictions and the wealthy who utilize these islands to shelter income and buy properties in shell company names? Won’t last long!! Buy now ! – inevitable Bust – Repeat.

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  8. Anonymous says:

    1989
    During budget debate on Nov. 29, 1989, then-Executive Council Member for Health Ezzard Miller had said….”…whether want to believe it or not, solid waste – garbage – is becoming a serious problem in this country..”

    Mr. Miller spoke of “the threats of pollution from leach heads” and “the threat of a methane bomb going off on the outskirts of George Town at any time.
    “If they think this is not a problem, go up to the dump and walk around,” he said. “Look at the leach head that is threatening the North Sound.”

    Mr. Miller said the government had been consulting with representatives of the Pan American Health Organization and the World Health Organization about the issue “on a regular basis for some time.”

    1998
    The problems of the George Town Landfill came up again in July 1998, when MLA Roy Bodden asked Executive Council member John McLean a question about “the seepage of pollutants and contaminants at the North Sound landfill site.”
    MLA Kurt Tibbetts asked if there had been any tests done to “see if there has been any excess pollution into the North Sound,”

    2019
    ..a significant jump in the sale price of Seven Mile Beach condos, which had a 35% increase over the average value of similar sales in 2017.

    Who in their right mind would buy a property within less than 2 miles radius from the Dump? If Mr.Miller was worried about “methane bomb” in 1989, just imagine what kind of bomb in ticking today.

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    • Anonymous says:

      You realize that those that are purchasing in the area are non the wiser? I would have believed that CIREBA would be advising the potential risks to buyers and let them sign off a disclaimer? This is a time bomb ticking and when the buzzer goes off, all hell is going to break loose. The only person I’m sad for is those poor school children next to the dump.

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      • Anonymous says:

        I believe it should be mandatory, not advising, but a full disclosure. A seller’s failure to disclosure material environmental hazards should entitle a buyer to damages for fraud; rescission; cancellation.
        I can’t wait for the first lawsuit. And it is coming.

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  9. Anonymous says:

    Shhhhhh, or Dart will buy the reservation.

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  10. Anonymous says:

    Only fools would buy a property within 1.5 miles from the Dump. Wait and see what is going to happen in the next few years.

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    • Anonymous says:

      you wait and see….
      you’ll be left behind.

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    • Anonymous says:

      hmmm… same thing we said about buying beach land 50 years ago..

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      • Anonymous says:

        What is the main cause of death in Grand Cayman? Sun, sea, locally grown fruits…. people should be living to 100+ here and dying of old age in their sleep. Yet, 60s and younger all seem to get cancer.

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    • Anonymous says:

      1:57, I am fed up with waiting as I have been waiting over a decade for something to happen with the Dump. All we get is talk, talk and more talk from Cayman politicians but none of them has the political will to do anything with the Dump as it is beyond their intellectual and political capabilities.

      A very sad reflection on the quality of the people who get elected here. We really need to open the political process up to a larger pool of people living on these Islands.

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  11. Anonymous says:

    To bad that the wages and rates for workers and the small contractors can’t go up. Guess only the developer is the one to benefit.

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    • Anonymous says:

      1:35, Developers rule on Grand Cayman.

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    • Anonymous says:

      The developers take all the chances and put up all the money so they should reap all the rewards. Who cares about all the workers as they are free not to take on the jobs at the fair rates set but the surveyors/developers.

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    • Anonymous says:

      Why can’t they go up?

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      • Anonymous says:

        Because the prices then will escalate even more. Once CHEC gets here then we will have a new low cost labor pool and cheaper materials directly from China.

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    • Anonymous says:

      And here comes more uneducated, poverty mentality laborers to meet the demand of a growing construction industry.

      Cayman will soo be segregated into two classes…. filthy rich and dirty poor.

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    • Anonymous says:

      This is the result of all the hard work of our great Unity Team government and the strong leadership of Premier Alden. Praise to you all and please be our Premier for the next 8 years so you can keep the wonderful work going!

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  12. Anonymous says:

    Never a better time to buy.

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  13. Anonymous says:

    cayman is a land of opportunity and is booming in all sectors(many thanks to dart)…due to a huge shortage in mid range properties and enormous rent prices…there is nothing on the horizon to think prices will plateau or fall…

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  14. Anonymous says:

    How much of the rise is due to “agents” charging ridiculous commissions of 5/6/7%? Exactly what services that they provide requires such extortion? No wonder there are so many of these slick talkers around. For what they provide a commission of 1 or 2% would be more realistic.
    This morning one of the salespersons was on a local radio station promoting a new development where she stated that the 3/4 million US$ starting price tag was such that first time buyers could benefit. Really??????

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    • Anonymous says:

      don’t see the connection between commision rates and market forces….
      in a boom the realtor makes a lot in a bust he makes little…

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      • Anonymous says:

        In a bust he makes a lot and in a boom even more.

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      • Anonymous says:

        Connection = prices are artificially inflated to cover silly commission rate.

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      • Anonymous says:

        Realtor bashing ain’t gonna reduce purchaser demands and vendors taking advantage of a sellers market.
        Jealousy ‘cos your’re missing out is not a good reason to hate realtors .

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    • Anonymous says:

      What is the correlation?..you have lost me..Everybody should work hard for their living, no matter the profession.. If you don’t want to pay for an agent to market and sell your property then don’t ,simple as that…I have found it is worth every penny and I was one of those doubting people like you..If they are good agents they work to get you top dollar for your property. I don’t have to worry about advertising, showing my property or doing all the paperwork..I have better things to do with my time..

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      • Anonymous says:

        Agents outside US and Cayman manage to do all that for a small fraction these shysters manage to charge.

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    • Anonymous says:

      Agreed! The “agents” are poping up out the wood works to make quick easy money. I believe in equal opportunity but if you look at the who the “agents” are, they are not of a certain shade. Very few locals are benefiting from these massive commission payouts. If you do see a local realtor they are given the worst properties to sell. I am not sure how the Government is sitting by and letting these things happen. Extortion!

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    • Anonymous says:

      You don’t need an agent. Just do it yourself.

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      • Anonymous says:

        The licensing of real estate agents is a total joke. Basically anybody and their aunt can become an agent here. The standards are a disgrace.

    • Anonymous says:

      CIREBA is a cartel. Some of them are amongst the most unethical professionals I have ever met.

  15. Anonymous says:

    Yes no where else in the caribbean. Only us fools selling out.

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  16. Anonymous says:

    I sincerely hope that the government can do something to improve the traffic flow on the roads to benefit residents in the eastern districts to get in to town quicker. Then, ” Caymanians”,as the custom was, will be able to secure ” a little piece of paradise” for themselves. There are many acres of land in the interior of East End, and thankfully much of it is still owned by “Caymanian families” but unless there is better access to George Town, where most people work, or until more businesses move further East the reluctance for working class residents to move East will continue. This island desperately need a major development plan if we are going to comfortably survive going forward. I don’t have any expertise in how to fix this but I believe if everyone who wants to buy a car can just bring in one and if nothing changes in the traffic in another five years or so we are going to get in our cars in the mornings and only get as far as out of our driveways. It’s bumper to bumper now from Guard House Hill to George Town between 7-9 in the mornings. WE DEFINITELY NEED SOME RELIEF.

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    • Anonymous says:

      I think the government owns some land in the interior of EE also. I guess that is where the reservation will be. When will we stand up and say enough is enough.

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    • Anonymous says:

      cig, in their infinite stupidity, missed that chance when they put goab in gt.
      if they had of put that east, those districts would have boomed, workers would have short commutes and congestion would be eased in gt.
      anyway, there is no fixing stupid.

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    • Anonymous says:

      By the time the 50 storey skyscraper is built we will have massive gridlock 5 days of the week during rush hours mornings and evenings. Not looking forward to when we have over 100,000 people living on Grand Cayman.

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      • Anonymous says:

        50 stories is not “iconic” . The Burj (which has been referenced) is iconic. 50 floors is not even the tallest in the region.

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      • Anonymous says:

        *zips by at 22 mph on my trek bicycle while you sit at a stand still burning gas*

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    • nauticalone says:

      I keep wondering….what is the forever (over 15 years now) holdup with the widening of Bobby Thompson Way?

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