2018 Year End Market Report

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An honest appraisal of the Cayman marketplace


In our last report we suggested it would be imprudent to bet against our economy continuing to expand, however with the onset of the slower Summer Season we should expect a slowing of activity until winter. Both have occurred. Our market is stronger than ever with stats coming shortly to back up that claim, however the sales activity was not as strong as it had been the first half of the season in hard sales data. It is normal in the off (summer) season for properties to remain on the market longer simply because the financial level of the off- season visitor is generally not as strong as the winter visitors. Part of the problem with the data we have is the fact that there are two newly announced high budget luxury properties which have quickly been about 50% reserved at prices exceeding the $5.0 range with barely a floor plan to look at. Within CIREBA, advance reservations only show as “pending sales” even when a deposit has been tendered, so those reservations are not yet in the equation as sales. As a result, the overall market is actually stronger than it looks on paper.

General Outlook

There were 15% more properties sold in 2018 YTD, but the dollar value was 21% higher so we had a 5.5% average value increase across the board. There has also been another 7% reduction in existing supply. That is significant and will keep prices up, even with the pre- construction product which has come on, and is coming on, in early 2019. With existing product continuing to disappear, the stage is set for success in the preconstruction projects. But as always, different market sectors often show a different picture. So, let’s look at those.


The number of closed sales (not reservations or pending deals) is up 4% over last year but the average price of the condos sold is up 24%. With the average sale at US$807,000 – it is not just 7 Mile Beach which is selling. That reflects value increases in this sector island wide. The newer inland condos continue to rise in price as long as they are closer to town. Ideal locations appear to be from Grand Harbour to the West, although from Grand Harbour to Hirst Road sales activity is also fairly strong. From Savannah to the East, interest is weaker for inland properties sought by full time residents. For condos on the water or on good beach in outlying areas like Rum Point, the appetite is reasonably strong there from visitors.


The number of closed single-family home sales in 2018 is 14% higher this year over last. The average price is now at US$963,000 but that is a decrease of about 6% YTD over 2017, so home values are not currently rising. Why is that when the overall residential market is doing well? Well, at this average price point we are not talking about waterfront properties (which is where Cayman property appreciation is most consistent). This is more a local market phenomenon. But there are also a number of really fine luxury homes which have not sold to bring up the average. The fact is that houses involve a more serious and usually more long-term commitment which makes buying a home a tougher decision. The one light at the end of the home sector tunnel is that lately, significant numbers of those wanting a single-family residence, are having another look at existing inventory because the quotes they are getting for building are higher than they expected. So, we expect an uptick in existing home sales in 2019.


Overallthe number of land sales is up 35% over last year for Low Density Residential land but the average sale price is down 25% which indicated a lot more activity in the lower priced end of the market. As we are 3 – 4 years into our recovery now, the trickle-down effect can clearly be seen.

Agricultural land, however, shows a significant increase in average sale price with more trading activity in the outlying areas. We were starting to see a few new subdivisions finally coming on line at long last, but the increase in land prices, plus the cumbersome new online Planning system, may slow that trend down.

Average sales prices for Beach Resort and Hotel/Tourism parcels have alsorisen significantly. A few parcels have been rezoned to Hotel/ Tourism this year and erstwhile Developers have been willing to pay a lot more for these to get the benefit of their 10-story height allowance.


The number of Commercial transactions is finally up significantly (64%) but the results are mixed as you might expect from a market sector in transition. Retail properties are selling now but that is likely because the average price paid has dropped 35% from last year. Office and mixed-use properties, while not as actively traded, have risen in value 28% since last year to US$2.8M as an average.


Little Cayman – by Wes Dangerfield

The real estate market in Little Cayman had a good year and the next is expected to be better. More and more people are seeing the value in having a vacation property on this quiet and stress-free Sister Island. Although there are several houses available to purchase on the island, there currently are no condos on the market. We have a growing list of people looking for a condo who may have to consider looking at stand-alone houses if they want to have a vacation property on the island this year. Raw land sales this past year have been decent, but as existing house/condo numbers dwindle we expect a price increase in this sector will follow.

Cayman Brac – by Mark Knowlton

The last half of 2018 saw the real estate market on Cayman Brac begin to emerge from the doldrums with increased activity. Sales mainly remain focused on properties priced near or below the market floor. There are still bargains to be had with interior land residential building lots on the market at well under CI$30,000, and prices starting at CI$59,000 for a good quality waterfront lot. Expat and visitor interest remains fairly constant. Prices in some segments of the market are seen reaching for pre-recession levels. Cost increases for new residential construction are now evident in the latest contractor quotes. This should eventually impact housing prices in general; however, asking prices for existing homes are lagging behind the value curve, making the purchase of an existing home a more attractive option. Provided that the local, U.S. and global economy remain buoyant, we should continue to see upward nudges in values across all sectors of the market on Cayman Brac.

New Developments

There are new projects popping up all over the place – at least in the Planning Department. In terms of Residential, Fraser Wellon’s Stone Island is well underway in the Yacht Club at pricing from $2.30M to $2.95M. James Lagan’sAqua (2 left in the US$4.5M range) and Brian Butler’s Seacreast (US$1.4M) both on South Seven Mile Beach are also underway and sold out or nearly so. The redevelopment of Lacovia, which is dependent on a late January AGM final vote, is likely to go ahead with James Lagan. The project will be a modern, clean, 3 tower design with sizes ranging from 4,000 sq. ft. to 11,500 sq. ft. and prices ranging from US$5.9M to US$20.8M. Then there is Fraser Wellon’s WaterMark on the beach just down from our main office which like Lacovia also will take about 3 years to complete. The size ranges are 3,900 sq. ft. to 12,000 sq. ft. with prices from $5.6M to $24M. This development will have a pedestrian walkway like the Ritz to access the spa, restaurants, and other amenities across West Bay Road which will also be accessible to the public.

Duty Levels

Considering our strong economy and the amount of building, both current and in the pipeline, somewhat surprisingly Government has decided to continue the duty reductions put in place on all islands during the recession. Yes, we do want continued economic activity, but an increase to avoid overheating our economy, and to pay off some of the unfunded debt liability we are carrying may have been prudent.

Tourism, Town and Traffic

While we don’t have figures beyond the third quarter of 2018 yet, at the 3⁄4 mark thetotal visitors were up 18% YTD over 2017 and the more important stayover visitor figures were up over 12%. Estimated spending was up over 16%. So, the news continues to be good as far as demand for Cayman vacations and by extension for Cayman properties is concerned. But our resident population has likely exceeded 65,000 by now.

The reasons Cayman is becoming more and more popular are no different now, than when we began to write these reports 38 years ago. However, it is becoming harder and harder to find similar benefits elsewhere in the Caribbean. Yes, all the islands have great weather and natural beauty, but what I refer to are Cayman’s friendly English speaking population, US dollars being accepted, close proximity to North America, and most importantly a family friendly, low crime environment.

Cayman’s desirability has led to population growth and infrastructure challenges which have not been satisfactorily addressed by successive governments. The effort has often been made, but it has often been both “too little and too late”. The public beaches are now becoming overcrowded and much more difficult to enjoy. The roadworks which have hampered island driving for the past 2 years are now largely completed and Government and Dart should be congratulated on finally completing that project. But while traffic is moving better for much of each day, during daily peak times and holiday periods the pinch points are still strongly in evidence and traffic jams are then commonplace. Both of these situations will need ongoing attention.

Downtown continues to suffer from insufficient parking and serious traffic congestion. To make matters worse, there is apparently no hard limit on the number of cruise ships allowed to call on any given day. Having watched Cayman cruise traffic for nearly 4 decades, it is our opinion that the optimum number of ships which can be comfortably accommodated (both for Tourists and Locals) and still provide good income for local business is probably three (3). Last week we had a day with 8! Travel downtown and on its surrounding roads was a disaster. And we are sure the cruise passengers had the same lousy experience. You may have heard about the Proposed Cruise Ship Docking Facility in George Town. Government is for it, but there is a lot of environmental opposition. Those who are pro-dock claim the new mega cruise ships won’t come here unless we build docking piers. I am not sure I buy that argument, but let’s say it’s true and we lose a few. That still could be considered a good thing, unless you would like to live in another St. Thomas. Bigger is not always better.

Population growth generally leads to a stronger economy, and further population growth. But while population and prosperity increase, they will bring with them a changing visitor demographic and a change in island character, exacerbating all the issues above, and creating more. In addition, much of our recent legislation will have the effect of increasing our population. Is that good for Cayman? If you find it odd for a Realtor to question the desirability of growth, think about this: what we are really selling here is quality of life. We must take care to not become victims of our own success, if we want to maintain our current excellent quality of life.

International Issues

Cayman is continually under pressure to make changes in our Financial Services legislation, and lately, our Constitution. Cayman is part of the UK and so in that regard it should be no surprise our Government is forced to follow the liberal trends which have been increasingly the norm in Europe. However, it was not European/UK influence which has been the major catalyst of growth in Cayman. That has been the US. And the US is still our major economic partner and one of the few countries to try to reimplement Capitalism instead of running headlong toward Big Government and Socialism as Europe is wont to do. A quick look at the relative economic pictures of both types of countries should tell you all you need to know about the path which should be taken.

It is truly amazing that the worlds high tax jurisdictions together with the Liberal Media, have been successful year after year, in painting a picture of Caymanand other low / no tax jurisdictions as the “bad guys”. Instead of a vibrant, diverse and thriving community where a host of non-profit groups assist Government in maintaining a pleasant, relatively crime free community, those jurisdictions which need an excuse for their own inability to maintain a similar standard, take shots at Cayman. Cayman has bent over backwards time after time to try to avoid one subjectively defined blacklist after another.


In fact, Cayman has more regulations in place than all of the high tax jurisdictions who are running this witchhunt, and we have always been willing to match any regulation which the high tax jurisdictions were willing to impose upon themselves. Cayman has acquiesced time and time again without the high tax powers following suit. Before we are forced to impose high direct taxes on our citizens and residents, the Cayman Islands Government needs to somehow break this habit lest our financial services disappear, as we are often competing with other UK dependencies which apparently are permitted to play by a very different set of rules.

The US economy is stronger than it has been for many years. The stock market is unsteady partly due to programmed institutional trading, but also because the political wrangling between the parties is making the future direction of the US somewhat uncertain. The deficit is a bit worrying. As interest rates rise those countries with large deficits will find it harder and harder to service their debt. But if current prosperity continues in the US, increased tax revenues will gradually reduce the deficit. Generally, as the US economy goes, so goes Cayman.


For the last several years during the winter months, some Seven Mile Beach residents have been treated to the sight of a single large pelican flying back and forth along the shoreline. Alternating between cruising on the air currents and folding his wings in a headlong plunge for fish into the clear waters, he has been a pleasure to watch. But this year is different. Wherever he went last summer he managed to find a mate there, and the couple now spend a lot of time flying in tandem, and fishing and just floating around in the shallows along the northern end of Seven Mile Beach. You probably won’t see them in the middle of Seven Mile or near hotels where crowds, jet skis and other noisy watercraft proliferate. So if you want a treat, walk or paddle up to the quiet North end of the beach – but please leave your jet ski behind!


Mirror, Mirror on the wall.... Cayman is still the fairest of them all (in the Caribbean). The more we are exposed to people who frequent other locations, the larger our tourist base becomes e.g. we have gained tremendously from the Hurricane misfortunes of the BVI’s last year. Not only have executives from prestigious firms who moved here temporarily, stayed, but also new types of business have been started here. Back in the ‘70’s and ‘80’s Mr. Jim Bodden began the push for high net worth Tourism. While that happened to a small degree, in those days the timing wasn’t right. With our good Commercial Infrastructure, the Luxury Condo market and relatively little crime leading the way, now the time is right. Therefore, International issues notwithstanding, we see continued clear and sunny skies for the first half of 2019.