Real estate prices in the Cayman Islands are rising to record levels and properties are selling fast. BCQS examines how the pandemic – and other factors – have impacted the real estate market in different districts.
Words by Ailie MacGeoch, Senior Valuation Surveyor for BCQS International.
Before the COVID-19 pandemic, we saw increased prices for most property types across the Cayman Islands. However, the Cayman Islands residential real estate market is multi-tiered, with different sectors impacted by varying factors.
The Seven Mile Beach condominium market, for example, which is primarily driven by overseas cash buyers and is, therefore, less affected by changes in credit availability than others, had seen a significant increase in prices from an average of CI$800 per square foot (psf) in 2015 to more than CI$1,150 psf at the beginning of 2020. Land in Crystal Harbour similarly increased from an average of CI$23 psf to CI$40 psf from 2015 to 2020.
However, certain submarkets, particularly in the Eastern Districts and the Sister Islands, did not see the same level of appreciation. The pandemic, resulting in border closures and lockdown restrictions, initially led to a drastic fall in registered sales from an average of 150 sales per month to only 26 sales in April 2020 and 18 sales in May 2020. The following months, however, saw a surge in activity and increased demand, particularly from overseas buyers looking to purchase property through Residency for Persons of Independent Means. As a result, October 2020 saw 168 transactions, rising to 205 and 232 in April and May 2021, respectively.
Having reviewed different submarkets in terms of the number of sales by district to understand the changes in demand since COVID-19, a significant increase in land transactions in Cayman Brac and Little Cayman was noticed. For example, the average number of land transactions between 2015 and 2020 was in the region of 50 sales in the first half of each year. In comparison, 2021 has seen more than 160 sales from January to the end of June.
Land in Lower Valley and Bodden Town also saw an increase in sales from approximately 30 for the first half of each year from 2015 to 2020 to 48 in 2021. CIREBA inventory, on the other hand, has gradually reduced.
There has been a significant increase in sales from January to June for all years since 2015. Currently, 2021 is proving to be a record year in terms of real estate transactions, and the lack of supply partnered with the high level of ongoing demand is resulting in an increase in prices for real estate in all sectors of the residential market.
It has been challenging to keep up with such a fast-paced market, and cash buyers, particularly for higher-end properties, continue to set new records for values. The Cayman Islands Residency for Persons of Independent Means has resulted in a significant increase in property sales over CI$2 million in both the condominium and detached single-family home markets. We see many properties listed for only a handful of days, and occasionally, properties sell for higher than their list prices.
The average price (net of chattels) for a detached single-family residence, as of 30th June 2021, is now over CI$1,2 million increasing almost three-fold from CI$445,000 in 2015. Various factors, including population growth, a greater number of luxury residences compared to 2015, and the recent sale of several properties for in excess of CI$3 million, have contributed to this notable price increase. Extraordinary market conditions have impacted the last year, and valuations continue to be reported on the basis of material valuation uncertainty. It is difficult to speculate how long such increases will continue. The rise in construction costs, supply of development land, population growth, border restrictions, the strength of the financial services and tourism industries and interest rate changes will all play their part in how the market performs going forward.
To learn more, contact Ailie MacGeoch, Senior Valuation Surveyor for BCQS International at:
Source of data: BCQS Market Database using data sourced and analysed from
the Cayman Islands Government Online Lands Information System.