High rents help fuel inflation trouble
(CNS): The local inflation rate showed no sign of slowing down at the start of this year after a near 20% increase in residential rents in the twelve months between March last year and this led to an increase of 4.5% in the cost of living. Inflation has proved to be a thorn in the side of the government’s claimed economic success story over the last 18 months and official figures released by the Economics ad Statistics Office this month demonstrate that everything, from electricity to food, is still on the rise.
The ESO Consumer Price Index for the first quarter of 2019 found that inflation rose by 4.5% compared to the same period in 2018. Most categories of goods and services measured increases, with the exception of transport and the miscellaneous category. The economics experts said that actual rentals paid by tenants rose by a whopping by 19.7%, utilities more than 9% and communication services increased by 7.7%.
The report illustrates the ongoing problem of inflation in what is already one of the world’s most expensive places to live.
The problem of costly accommodation, which is a problem for employers as well as employees, is being fuelled not just by the general increase in the cost of living but also by many owners opting to rent on the Airbnb and other tourist platforms, creating a shortage of affordable long term rentals.
Earlier this year at the Chamber of Commerce Economic Forum, the current president, Chris Kirkconnell, warned that this was going to become a serious problem for businesses with workers, especially low-paid employees struggling to find somewhere to live, and he urged government to address the issue.
However, regardless of the rise in prices, people did not stop shopping. According to the quarterly trade figures, Cayman imported $271.34 million worth of goods in the first three months of this year, an increase of 11.2% on the first quarter of last year. Non fuel related imports increased by almost 12.7%, accounting for $239.65 million, while a drop in oil prices led to only a marginal increase in the value of petroleum imports at 1.2%, even though the volume increased.
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Category: Business, Real Estate, Retail
Demand is high because of the AirBnB rentals but also many landlords are paying much higher mortgage payments, which all gets passed onto the tenants. This is simply supply and demand. I think a great way to help reduce cost of living would be to remove duty off all essential food items imported.
But many landlords need Airbnb to pay their mortgage. That is a simple fact.
Also, dont start rejoicing at the statement “Cayman imported $271.34 million worth of goods” because when you look inside the makeup of that figure guess what? Its construction material imported by the developers who the Government has given concessions to so they are not paying duty on it. They report the value of imports but how much of that went into the Government coffers or the local economy ?
On ecaytrade and you will see SHARED rental accommodations (your own bedroom/bathroom within someone else’s apartment) for average CI$1,400.00 EXCLUDING UTILITIES. It’s mild blowing.
We were forewarned, and many people didn’t listen. They also haven’t lived outside of grand cayman either to understand the root of the problem. For example, public transport as primary mode of transportation was an alien concept to me until I lived in the UK. And house sharing is not an option but a necessity in some postcodes.
I increased the rent only to cover my increased insurance costs. My fear is that it will have to increase again once the premiums go up after this hurricane season. Unless and until the government can do something about the ever increasing insurance costs not will change for the better.
Mine went up apparently due to increased mortgage rates, 3% in the last 2 years I’m told.
free solutions:
reduce the the cost of government(reform the civil service in line with e/y and miller shaw reports)
bring in a private traffic police force
allow sunday trading
allow gambling for tourists/expats (will increase cig revenue allowing the to cut taxes)
deregulate all the cayman cartels like taxi’s, grocery cartel
sell turtle farm and cayman airways
You are an example if hatefulness.
And legalize prostitution too??
Nah just go Mango Tree.
what about childcare and education costs?????
cayman is doomed for its local population….the only people able to raise a family here will the lawyers/accountants living in gated communities
Most accountants live in Lakeside.
partners don’t
No, they live in England and Canada.
Only ’til they get Status
Soon they will be the only ones who can afford to live here other than the overseas millionaires and Big Mac will get his wish.
cayman is a total rip-off on every level and it has been proven to have one of the highest cost of living rates in the world.
what have the do-nothing ppm done about it for the past 7 years??????
Highest cost of living. Excluding income tax. Relatively cheap if you include it though. Be careful what you wish for.
And what about the big elephant in the room that gobbles up a huge chunk of everybody’s income?
You know.. THE INSURANCE COMPANIES!
well said. the cost of insurance is the biggest cost associated with home ownership and feeds into higher strata fees…which leads to higher rents….etc.
and CIG
It’s great that the head of the Chamber has requested government to address this issue. This issue is a glaring example of what happens when successive governments ignore the interests of the majority of its people whilst catering to the oligarchs and international property developers who then reap windfalls. I wonder how many condos. and apartments sit empty in Cayman during their foreign owners’ absence from the islands. Look at the developments that sit empty because they are priced way out of the reach of the ordinary Caymanian and aimed at international purchasers who failed to materialize. Government needs to restrict foreign ownership, regulate Air Bnb, tax apartments that sit empty and reserve certain land for Caymanians only – but will they make the tough decisions? no, of course not. There is more in it for them if they serve as the developers’ lap dogs. Then you will hear the straw man argument that land scarcity is why 50 story buildings are needed – disgraceful.
The ability to place the restrictions you speak of already exists. The government refuses to enforce them.
For one thing, I seriously hope that we are not giving out work permits for realtors. There are far too many on island already and I am almost certain that most of the companies are not owned by or staffed by Caymanians. There’s a new company popping up every week, it’s ridiculous.
Jackpot. Also why in the history of these islands the real estate sector has never been properly regulated unlike say the US, Canada where ones would be state certified to deal in real estate. AML/KYC requirements have only just been enforced surrounding the property sector.
It is ludicrous that anyone can become a real estate agent in Cayman. No requirement to have any certification or training in anything. Where else in the developed world can one become a real estate agent with zero training or certification? Certainly not in the U.S. Canada or the U.K.
And the few Caymanians that are left in the Real Estate business are forced to sign independent contractor contracts so that the Expat Employers don’t have to pay pension or health insurance..
I have searched the Labor and can’t figure out how a real estate agent can be an independent contractor but forced to act as an employee but not paid like one..
And basic things like expectations to train and recruit Caymanians, and pay minimum wage and pension, are not.
Sadly, we do and it used to be very cheap for a permit. How can these people be allowed to be here and not have a steady (or sometimes any) income?
All of them are either Caymanian owned or staffed.
The reason they’re popping up everywhere is because they want to be part of the gravy train. Some of these cartel members, who used to be barmen, dive instructors or waiters are now earning a fortune thanks to price / fee fixing which should be banned.
It comes as no surprise that when employees of a certain franchise in Cayman go up to the US for their annual awards, the Cayman employees clean up. All thanks to price fixing. And yet they still give themselves a pat on the back!
Correction most of the are Paper-Caymanian owned..there are very few left that are Caymanian owned..I don’t understand how immigration can give a permit to a waiter or waitress to be a Real Estate agent in their off time..Why isn’t CIREBA providing any training for young caymanians to enter the field?
They should assign this to Austin Harris he has a magic wand and a bottle of magic potion that makes every threat to Caymanian survival become a figment of our imaginations and poof just like magic … the problem no longer exists
Austin Harris is what you get when you elect blowhard radio talk show hosts who beat women. No one should be surprised that he also promotes social issue snake oil.
How does “actual rentals paid by tenants rose by a whopping by 19.7%, utilities more than 9% and communication services increased by 7.7%” combine with other increases to create an overall inflation rate of only 4.5%? Surely rental costs make up 20-25% of the average renter’s monthly spending?
Probably because the basket of goods they use is changed every time they calculate and they include a lot of things the ‘average renter’ doesn’t pay for like private school fees.
CUC keeps raising the rates every year in the summer, when we use electricity the most… but yet the gov’t won’t do anything to cap that b/c they’re all involved in the profits! Every time the newspaper comes out with the article about how CUC has made a profit again it blows my mind! Really? You have to report that BS! It’s like slapping every one of us in the face, gee wiz, so glad we could help you drive those fancy cars and live in the luxurious homes you have all over the place! That’s just a small thorn in the side of normal residents here. Groceries are waaay over priced too, what’s gov’t going to do about that? I think it’s safe to say that every single member of this administration need the boot! Fresh blood in the gov’t to fix all the issues that just keep getting worse every year! Enough with their BS, let’s get them out of here!!! #vote
OfReg are gatekeepers of CUC’s monopoly. Until this arrangement changes CUC have carte blanche to print money
Buy shares in
C U C and reap some of the profits, i guess thats too big for you to think about
Keep drinking that Koolaid and feeding the corruption
Ethically, I could not buy any shares in CUC. For one thing, for years they continue to rape us so there is no way their shares don’t do well.
If I had a monopoly that was giving me a guarantee that I can make a certain percentage of profit every and a regulator that says that if I don’t make it, they will go ahead and give me the go ahead to to raise prices, I would be laughing too…but nah, I got ethics!
Perhaps Chris could address the cost of groceries next time he’s on his podium and call on Govt. to look into that?
Why don’t you step up and bang the drum? At least he puts his name to his comments.
It would be pretty difficult to hold the position of President of COC and remain anonymous, however the point being made is the irony in how he can beat a drum about the cost of living when his family’s empire is playing such a pivotal role in it.
JD
Hedge yourself and buy some CUC stock, if you can’t beat them joint them.
9:07 am , you saying that now, but come election you and most of the rest will vote them in again,Caymanians have a short memory and they know it, that’s why they do what they want and when they want.
Basically the main problem is Government has given Cayman away to the big developers and investors (ie Dart) in the form of concessions while taxing the hell out of the little man who already struggles to make ends meet.
Dart has too much invested in Cayman to pull out now so quit giving him concessions on his projects! Tax him to the max, he can afford it!!!
How are you being taxed exactly? There are duties paid on the goods you consume, but that would be about it. Or are you referring to stamp duty?
I am not arguing inflation, but your tax comment seems off base.
Pity idiots like you reproduce and vote….import duties ARE a TAX and they AFFECT everyone and because of purchasing power, the most financially vulnerable are the hardest hit.
Your duty/tax payments payments are minimal compared with the rest of the western world.
Yes, so minimal that we have some of the highest fuel prices in the world! Newsflash…the cost of energy drives up the price of everything….Like I said earlier..pity that donkehs like you reproduce and vote….
The tax on fuel hurts us the most. It drives up the cost of everything on the island.
The problem is twofold – Airbnb and greed. Other countries have taken steps to limit Airbnb rentals and if Govt does not act soon, residents will be living in tents.It is no coincidence that stayover visitor numbers are constantly rising, they are taking an ever increasing percentage of the local rental market.
The Cayman Islands have laws designed to prevent foreign nationals from carrying on businesses without local participation, dominating aspects of our economy and from operating in a manner not conducive to the public good. We choose to not apply them. These are some of the consequences.
I agree. The requirement for a Cayman partner at 50%, that contributes almost nothing to the capitalization of the entity doubles the required ROI of the partner contributing the Capital, thus fueling inflation.
I didn’t know anyone was entitled to ‘required’ profits. Money can go wherever it pleases, there’s enough of it around these days thanks to inequality and corruption in most countries. If the ‘capital contributing partner’ couldn’t make the desired profits here he wouldn’t come
It is 60%, and the percentage is plainly not the only aspect of the law you do not understand.
They don’t need to have a Cayman partner to rent their properties on AirBnB or any other website. They just need a Tourism License. Basically, what’s happening is this: they buy/build a home here and want to make some money to pay their home insurance so they rent the house and block out the time frame that they vacation here. This way, they can still use the house as well as their vacation home. If they rented the house long term, they wouldn’t be able to use the house themselves.
Thank you Captain Obvious. Is there something wrong with this?
No, but it is a problem when they buy up 200 units and thereby exclude anyone living here from whole sections of the housing market.
I would much sooner have stayover visitors and Airbnb guests than cruise ship who spend so little on island and clog up George Town, and parts of Seven Mile Beach every day.
8:44, You do realise that a large majority of people who use Airbnb on their premises use it to help pay their mortgage and help keep the cost of maintaining their property down?
What about the grocery bill? It has gone through the roof. Only feeding my wife, child, and myself. If anything needs price controls and oversight it is the Supermarkets who seem to be on the take. Don’t think we don’t notice.
$1.00 a lime at Kirk’s, up from 2/$1.00 all summer
49c at Fosters, up from 39c all summer
Why?
7.99 for three medium sized peppers
LOL. It’s all about the limes.
Don’t get me started on the lemons
If you can’t afford to live here then move.
WOW!!!! Let’s see how you live 11.56. Are you saving? Kids? Life insurance? all bills paid? debts paid? I could go on and on… But when you have responsibilities and want to live life – fullfillingly, things like $1.00 vs 2/$1.00 for a lime matters.
My daddy always said if you have to as how much something is you can’t afford it.
Moving is not that easy if one is Caymanian and all your family is here.
I would really like to know your living strategies since you seem to not have a problem with the affordability or lack there of on island.
No kids, dual income, both of us have good pensions. Status. Need I say more?
It is good your line will die with you then mate.
Yet you will still have the charlatans and idiots making youtube videos asserting that an increase in population to 100,000 will bring down prices……..Eventually the reality is exposed.
The CIG push for 100,000 plus people on Island is insanity. The only people who will benefit from this push are the developers and real estate agents.
Ultimately, it will force up even higher the cost of living and lower the quality of life on Grand Cayman for the majority of people who live here.
It doesn’t just need to be the developers and real estate agents, it can be you. Buy a home, heck buy two. The cost of borrowing is at an all time low.
I see so many Caymanians driving around in brand new cars that are fully financed. Cars aren’t assets, homes are. Put your money in the right place.
Get an expat to pay your mortgage with rent…winning!!
But 12:34 all of what you say is not sustainable on a dinky island. This is not America or Canada.
Sit on the sidelines then, just don’t complain about everyone else taking advantage of the market.
The cost of buying is not at an all time low, mortgage rates have basically doubled in the last 3 years.
Every mortal thing is expensive on this island!! Food, clothing, housing rents, a/c, electricity, schooling, medical, Dental, alcohol, hotels, air fares….the list is endless! The cheapest item is gasoline. Believe me, you are far better off paying income tax. At least if you are on a low income you don’t pay tax and get benefits from the Government for your housing, medical and dental treatments and optical. etc., and state pensions as you age.
Income Tax is okay as we already pay pension ‘tax’. It is property tax that is a huge worry as then a person can never truly own a property.
Better off paying income tax!!!!!! HAHAHA Obviously you’ve never paid it!
You lose half your paycheck before you even get paid. Dear god.
And the entire economy is adjusted to everyone making 1/4 – 1/2 of the salary in their contracts…so things are still affordable…not here where there are enough moderately to very wealthy people to keep prices for everyone sky high
Actually, 1.52pm I do pay income tax. I live in the U.K. it does not take half your salary only a percentage. I also lived in Cayman too. Ex pats earn more in Cayman but Cayman takes it all back in the horrendous cost of living.
Hes not planning on owing any
if we working paycheck to paycheck with full time job…fellow caymanians, how can we retire here????our home??? i love my country, but i am afraid i will be forced to find a more affordable country to live in….politicians, any suggestions?
This is a sad reality. We are literally pricing ourselves out of the market. As Mr. Billy Adams stated, “Who are we developing the Cayman Islands for”? Cost of living has become a runaway train, elected officials seem to be oblivious to this.
You can’t survive and retire in cayman. What you spend every year you must also add that to your pension which is impossible to do, plus with cost of living going up there’s no way of knowing exactly how much you are going to need when you are ready to retire. If you’re lucky to have paid for your home. Then, House insurance will killed you.
I knew I was not going to be able to retire even after injecting money into my pension for over 20 years, I still won’t have enough. I worked with many top firms, expats investors lawyers bankers and they all told me the same. In cayman, they come make their money, have kids, get dental and leave.
Cayman is only for the rich now. Our government sold our country a long time ago. If you have the courage, start looking at your retirement plan now. If you have to rebuild somewhere new and different don’t let fear control you.
I loved Cayman, but cayman has changed too much in the wrong direction and it doesn’t meet my needs.
Expats have started to leave Cayman this year because it is just too costly to retire here now. Health insurance costs are a killer for anyone over 60 years of age unless one is independently wealthy.
Not just expats. With pre-existing conditions, this Caymanian will not be able to retire here.
retirement???…you might have hundreds of thousands in your pension account…but you will only get $1,200 per month.
good luck living on that in your ‘golden years’
The pensions that operate here screwed us on that one. They were 100% behind the new pension laws.
RENTS must increase because government has done nothing big to lower the COST OF LIVING and the COST OF DOING SMALL BUSINESSES in the Cayman Islands. Custom duties are too high, Worc fees are too high, Government all about growing the size of government! CUC and some major companies don’t have competition. Light is too high! Planning Department too much red tape! Building material is also too high! Too many laws to follow more than people! So … what are Landlords suppose to do ??? Cayman is rated more expensive than the cities of New York, London, Tokyo, and Miami!
Yet all you hear from our politicians are the same old quick fix talks about making more laws to increase fees and duties, give people in need more handouts, help people get slave work under big names like Dart, … no one is talking about making a freer and fairer market that will turn our young people into business owners! The capitalistic game is deliberately made hard for Cdymanians, and well-off folk get by, and buy up our beaches, our natural resources.
All our MLA’s it seems like are thinking about votes. They are not willing to OFFEND the big names. I believe they are scared.
Comparing Cayman to the US, UK and Japan is ridiculous; we don’t lose half our paycheck to income tax and duty is the same as European VAT. CUC is even quite cheap compared to most small islands; its even cheaper than places like Germany.
8:49, You obviously must be a civil servant because those of us who are not have to pay a lot of money for health insurance. Incredible cost in Cayman.
No I’m not. Insurance, whilst painful and very poor value here, is still way cheaper than paying a lifetime of income tax!
1:58, Then you must be a very wealthy individual, of which there are many on island. If one is a billionaire or a millionaire with large assets then I accept your point about paying a lifetime of income tax.
8.49am Has CUC given you shock treatment?.
Google the rates. Half the price of USVI for example and cheaper than Germany. Hardly excessive.
https://www.worldatlas.com/articles/electricity-rates-around-the-world.html
Please help me. I do not see the electricity rate for the Cayman Islands on the list. What is the rate for Cayman?
Go to CUC website. It’s above $0.26/kW with fuel charge, plus various monthly fees. Or about US$0.31 plus fees. It’s about three times what I pay in the US. Less than Germany but trust me you don”t want to live in Germany in their tiny little houses.
Looking at CUC rates they are also three times what I pay in Canada.
Some people not keen on easily verifiable facts huh?
Verifiable facts. What? The fact that CUC rates are 3 times what people pay in the U.S. and Canada.
New York is much cheaper, left Cayman over 2 years ago and I don’t see myself ever coming back. About to hand in my cayman passport 🤣😂💯
What closet in New York are u living in ? Cheaper my ass .
I live in beautiful 2 bedroom house, just don’t have a garage maybe my next home that I buy i’ll Add. Come see your living conditions in cayman 🤣🤣🤣
Yeah right. Federal, State and City income tax. Enjoy.
I’m paying my taxes, without complaining as high as they are. I will can go grocery shopping spend 100 have food on the table for a whole week, my power doesn’t go out every time there’s rain, water is always on. If I don’t feel like driving I can hop on the bus or train. When I order stuff online it’s delivered for free with a day or two. I can enjoy any part of the city for free. Best part about living in New York within 6-7 blocks not a soul knows me or my business.
So yes go ahead and bash me for paying taxes. I rather know why I’m paying them than allowing government and supermarkets charge me $8 CI for a gallon of milk.
I don’t have to catch a plane every time I want to get out the city. I think I saw cayman airways charging 640 for a round trip to Miami!
You are all paying taxes too, but it’s call import duty 😂🤦🏼♀️🤦🏼♀️
p.s. but Uncle Sam doesn’t know I keep my money in cayman 🤣🤣😂😂🤣😂😂🤣🤣
Great. See ya. BTW google FBAR penalties before you get carried away. Doh!
So what you lose in Federal, State and City income taxes, social security, medicare, property taxes and sales tax you make up for by saving $100 a week in groceries? Whatever.
That’s the most ridiculous thing i ever read on CNS!
You have every right to defend your little island. That was me one time too. Then I stop caring, I had the privilege to travel, see the world, saw that there was life outside of the Little Rock I once called home.
As a caymanian living a board and looking in, 746 days since I left. There’s absolutely nothing you can say or bash me for living in one of the worlds best city’s while paying my taxes that will temp enough to visit JetBlue site to look at flights to come visit. Never!
I do hope you are well educated, have a good job, and good at kissing your boss ass. have your home mortgage almost paid for and a partner second income and your kids in private school.
I wish you all the best. There’s no right or wrong here. Just different views.
Have yourself a great day!