It is well understood that the first two industry power houses have
been mainstays of the economy over the years; however the real estate
and development industry has been intrinsically linked to both tourism
and financial services, providing the physical framework within which
both can operate, while at the same time contributing significant sums
to the Cayman Islands government’s finances and the country’s economy as
a whole.
The economic headlines over the summer very much concentrated on
jitters on the world markets which forced dramatic drops in the various
international indexes, yet digging a little deeper behind the headlines
gives a picture of steady, if painfully slow, growth in the US which
ought to be carefully considered against this backdrop of market
freefalling.
Pressures from international regulatory bodies placed upon
entities to show a physical presence in their offshore location has meant that
the Cayman Islands are quickly becoming an attractive place for relocation.
It is certainly not a secret that the
volume and value of real estate transactions has fallen dramatically over the
last two years. Statistics from both Lands & Survey and CIREBA, our real
estate association have confirmed that time and time again.
When opportunity knocks…time is of the essence and timing is everything,
all these phrases epitomise the current timing of the real estate
market in the Cayman Islands.
Some of this is the fault of the media which in recent times has become much more of a sales tool than an objective source of information. But I think some of it is also the result of focusing on short term trends rather than taking a longer term view.
Here we are in the middle of summer which is not the usual time for good
news in the Caribbean real estate markets. And further, I am not known
for trying to make positive predictions without good solid evidence to
support it.
Happy New Year?
January 5, 2010 Hopefully amidst all the financial woes and gloomy predictions, we
will all find time to give thanks for all the blessings we have
received over this past Christmas Season.
So, what’s happening in the real estate market and what factors are there that may have significant impact on it in the coming months or years? Well, Coldwell Banker’s mid-year Market Report is now out in hard copy and on our website. There is not room to reprint it here, but in summary the last six months have continued the downward trend of prices and sales volume. However, just in the last month or two we have seen a marked increase in activity. Why? Well, there are several possibilities.
The frustrating part is that sellers do not want to hear what we have to tell them, in other words, that their property is not worth what they think it is and that they have to list lower if they expect to get their property sold. This was an inevitable reaction to the worldwide economic crisis, which is heavily affecting the US. Real estate values had been inflated in the US for some time and it was only a question of when (not if) their market would turn. That, combined with the decline in the stock market and very tight credit, has made it difficult for many Americans to make discretionary purchases. As much of our buying pool is from within the US, the slowing of our real estate market should surprise no one.
As the Baby Boomers age, finding ways to earn passive income has become more important. Many of them are ready to retire from their regular jobs and have been looking to supplement pensions, retirement accounts and Social Security to enable them to retain their usual lifestyle.