Residential property in the Cayman Islands rises in price despite the pandemic
Prices for housing in the Cayman Islands keep rising. A dramatic rise was observed over the last two years before the onset of the pandemic. Holiday homes here were rising in price by almost 15% annually.
To this conclusion came Jeanette Totten, broker and president of the Association of Brokers specializing in real estate sales in the Cayman Islands. She noted that when the pandemic came, it didn’t affect the already established trend. At the same time, housing prices have begun to gradually stabilize in recent months, and there are more offers on the market now, informs The NY Times.
Why did supply exceed demand?
According to Totten, the local real estate market is now in a holding pattern. Those who own housing here are mostly wealthy citizens. Housing in the Cayman Islands is a part of the investment portfolio. They don’t need to rush to sell, and they don’t incur losses to the banks. Now they are waiting for better times, getting through the Covid-19 pandemic.
If anyone is selling real estate today, it’s those homeowners who expected to receive a rental income. In the circumstances of the pandemic, they decided to sell their objects which stand idle. This situation led to the fact that supply began to exceed demand, which was not the case in 2019.
The cost of housing
According to CIREBA, the price of residential real estate located in the Cayman Islands has increased significantly. In 2019 it was estimated at about 942 thousand dollars, but in 2020 it became worth 1.16 million dollars. However, the number of sales has fallen from 512 to 358 over the past two years. The overall value of these transactions has also decreased. In 2019, $ 343 million worth of properties were sold, while in 2020 — about $ 311 million.
Those who buy local housing are mostly foreigners. They purchase about 70% of real estate in the Cayman Islands. The most frequent investors come from the United States, Canada, the United Kingdom, and Western Europe.
Favorable conditions for purchase
Foreign investors seek to buy property in the Cayman Islands because of its high profitability. The state, where only 65 thousand people reside, is very popular among tourists, which provides great rental opportunities. In addition, the Caymans are almost completely tax-free.