Although our year to date sales figures cannot possibly keep pace with previous years due to the decrease in foreign investment, we would describe activity levels as ‘reasonable’, all things considered.

The combination of residual local earnings from the post Ivan years and reduced property prices has fuelled the interest. Added to that recently, has been the Government’s temporary Stamp Duty discount and the CIREBA 20 per cent Buyers Rebate. On an average Residential property, the market-driven lowering of prices amounts to +/-25 per cent. Add to that another 3.5 per cent discount on closing costs and a buyer is paying as much as 30 per cent less for the same property now than a year ago.

That figure is significant, especially in a market that does not have a mortgage crisis due to the sound lending practices of our local banks. Caymanians and long term residents recognise the long-term strength of a real estate market on an island that has only a finite supply of land. We are constantly on the lookout to upgrade our property holdings, both for residential use and investment. No one ever gets hurt in the long run owning real estate. Many very wealthy people got their start in the property markets. For others, it provides an investment vehicle for their work income. We know several attorneys who make more investing in real estate than they do in their practice (and that’s saying something). And when you consider there is no property tax on the properties you hold, it’s a no brainer.

Right now it is good to borrow at these low rates, and good to be long on cash, but only because it enables you to make good discounted investment purchases. Staying in US dollars with the way the Obama administration is printing them is not a good long term strategy. Inflation is the only possible long term result of Obama’s actions.

The only question is, how much lower and longer can it go? The answer is that we would not be surprised to see it last well into next year. And the depths, well that depends on the supply available in whatever part of the market you are searching. Our market is relatively small and so large supply gluts are unusual.

What about the other threats: Cuba, and the ‘Know Your Customer’ police? We don’t see anything happening in Cuba, which will make it a competitor in terms of property sales. Title issues will ensure that for many years. However, if Cuba remains relatively safe and inexpensive, and Obama eases restrictions on American travel there, it could hurt our tourism which will take more money out of circulation due to fewer visitor arrivals. That could affect prices as rental return will decrease. But with Bank CD interest so low and being the only conservative alternative, we think we will continue to be ok here as well.

The ‘Know Your Customer’ regulations situation is a bit more worrisome on the face of things. However, Cayman’s demise was predicted back in the late 80s when the Mutual Legal Assistance Treaty was signed, again in the mid 90s during the OECD Black Listing, then when Attorney General David Ballantyne tried to sell us out in the late 90s, and now again. In each case Cayman did what it had to do to satisfy the whims of the high tax jurisdictions even though they themselves were not then [or now] playing by the same rules. And invariably, the Financial Markets created new instruments which needed the expertise and efficiency which Cayman has to offer, and we continued to bump along – just as we are now.

As much of the business that is being done now is local business and since we, in the private sector, are all trying to cut costs, we are hopeful that the new government will use its influence to streamline the civil service. There are a number of departments with inflated budgets, which are now actually providing worse service and far more time consuming bureaucracy. In times like these, when we are trying to encourage people to do business, we can no longer afford to suffocate them with needless bureaucracy. The best way to generate business is to make it easier to do business. Granted that is a concept which is foreign to most governments, but we are small enough that if we truly want to make business easier – we can. We hope we have elected a pro-active new government.

So how do we look going forward? Even faced with today’s challenges, with a new government, at the helm, and a resilient populace crewing the boat, we feel positive and expect Cayman to continue to sail on – “steady as she goes”.