December 2011
Data through November 2011, as indicated in the above charts, show exciting growth in Cayman’s real estate business this year. There has been a significant increase in dollar amounts of sales over 2010, even though September through November of 2011 saw real estate figures drop from the highs of earlier in the year.

The year-to-date rebound is welcome news and establishes 2011 as the first year since the global economic downturn of 2008 that figures have improved.

Through the end of November, there has been $612.5 million in transfers. This represents a 199 per cent increase over 2010, with December figures yet to be finalised.

Additional favourable signs for real estate in Cayman are the announcements of massive commercial projects that bode well for 2012 and beyond.

The 2011 Rebound
The big jump in sales dollars amounts paints a favourable picture for the CIREBA market, showing that buyers are ready to begin investing again. For now the number of property transactions continues its downward trend.

This means that although fewer properties were sold, they were at the high end of the market, an important vote of confidence in Cayman as an investment locale.

The drop in mid-market properties is not surprising given the reduction in the resident population in the Cayman Islands due to two key factors:

1. the downturn in the economy has led to significant staff layoffs and
2. the rollover policy instituted in 2004 has forced many people to leave the country and discouraged home purchases. Government made a significant step toward addressing the problems with the term limit policy when it announced in September that rollover would be suspended for two years.

Realising that approximately 6,000 people would be required to leave the Islands at one go (due to the huge increase in hiring following Hurricane Ivan, seven years ago), Government has suspended the term limit for those due to be rolled over in 2012 and 2013.

Several professional associations (CITA, CIREBA, Cayman Finance) as well as the Chamber of Commerce have declared their opposition to the term limit policy. It is hoped that Government will see the detrimental effect of forcing proven residents to leave and will further act to revise or abolish the term limit.

Government has also proactively tackled the unusual spate of crime which occurred earlier in the year. The flare-up appears to have been a unique occurrence and criminal activity has greatly diminished since the arrival of a police task force from England, which made headway with gang crime.

 
Mega-developments under way
Commercial developments are the backbone of Cayman real estate. A large number of mega-projects has been announced in 2011 and three of these are already under way. Important details of the ForCayman project were finalised in mid-December to advance the West Bay Road bypass, which will create automatic commercial frontage where none existed before.

The Shetty hospital also moved closer to reality with the purchase of land in December. Cayman Enterprise City has announced that it has retained several tenants and will soft launch their opening in temporary rental space in 2012.

Projects of this magnitude will go a long way to stimulating the economy and creating significant real estate transactions.

These large-scale commercial developments may well stimulate mid-level property sales as well as retail and office commercial. Residential properties will be required for the increased number of employees moving to Cayman for the Shetty Hospital and CEC.

And with Government offering easier access to work permits for CEC, new arrivals will more likely be inspired to purchase rather than rent.

With the significant upswing in overall dollar figures in 2011, the outlook for further growth in the rebound is promising. The progress anticipated in 2012 in the large commercial developments will add strength to the market and help stabilise the Cayman real estate industry.

Source www.eso.ky