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The definitive guide to living and working in the Cayman Islands
Aug 24, 2016 

Real Estate in the Cayman Islands

Last updated: 4th March 2016

OVERVIEW OF THE CAYMAN PROPERTY MARKET

Finding a slice of paradise to call home need not be such a challenge. In fact, if you are lucky enough to live in the Cayman Islands, finding a home should be one of the more exciting tasks on your to-do-list. There is such a diverse selection of properties available in Cayman— from high-end luxury offerings to those on the more affordable end. Value-wise Cayman compares very favourably to other Caribbean Islands, especially taking into consideration our high standard of construction which is not always offered regionally. Real estate companies are numerous, so there is an ample roster of local professionals to assist you with your search for a rental or something to buy.



With a stable economy, high standard of living and beautiful environment, the Cayman Islands is also an ideal place for you to own property. With no annual property, income or corporation tax, nor capital gains payable in Cayman, buying a property here is certainly worth considering. Moreover, with such a strong rental market, it can also make for a smart investment. The added benefit of making an investment here is that the variety of properties for sale— homes, villas, studio apartments and condos— are suited to any purse. Further along in this chapter you will be given a comprehensive break-down of popular neighbourhoods and their associated price ranges as well as an overview of all the districts in Grand Cayman, Cayman Brac and Little Cayman.

When devising a plan of action for your property search and potential purchase, however, a general understanding of the local market is the recommended starting point. Cayman was not spared from the direct effects of the global financial recession of 2008. The latter has contributed significantly to the contraction in the market in recent years. But 2014 was a year of recovery. In fact, reports indicate that strong performance in the high-end property market increased the overall value of sales by 27 percent since 2013. Furthermore, 18 Forum Lane, an 85,000 square foot mixed commercial and residential LEED complex in Camana Bay, is now available. This massive development will be a significant addition to the commercial and residential property market. What is the expected ripple effect? Possibly, you will see another exodus of commercial renters in George Town moving to Camana Bay to take advantage of the attractive amenities that such a building will offer. Luckily, the Government has promised it will look to revitalising the capital— enhancing areas around historical landmarks, pedestrianising areas, generally making the downtown area and waterfront more attractive to investors who may want to convert old commercial spaces into mixed use commercial and residential properties. Investors should keep a keen eye on these future developments, particularly any movements towards realizing the cruise ship terminal development project.

The CI$7 million refurbishment of the Cayman Islands Yacht Club was completed in 2014, which will undoubtedly raise the value of the surrounding residential area and potentially, there should be an increase in property sales in the near future. Many real estate professionals are predicting that the market will have even more activity in 2015, as more businesses open in Cayman Enterprise City (CEC)— a special economic zone. Currently, there are over 230 companies operating, with over 800 employees. As CEC continues to expand, supply undoubtedly will be impacted, with prices of properties possibly increasing. With the first phase of Health City Cayman now completed and fully operational, it is projected that residential property in the surrounding area should become even more attractive to investors as Health City continues to grow. The hospital announced in May 2015 that it had received accreditation from the Joint Commission International (JCI) to target US customers and that is projected to boost business by 75%.

The Cayman Property Review, an independent property survey conducted by Charterland, a chartered surveying company based in the Cayman Islands, reports that the total number of open market transfers registered with the Cayman Islands Land Registry for 2014 were 1362, which is a 27% increase on 2013 figures. However, the number of sales is still a remarkable 48% lower than what occurred in 2005, a year of rapid growth following the infrastructural devastation of Hurricane Ivan the year before. Nevertheless, the increase in sales activity in 2014 was matched by the increase in the total value of these transactions that exceeded CI$500 million. This has not happened since the period before the global financial crash in 2008. In fact, there is even more good news: the total value of sales for 2014 is 28% higher than the total value recorded in 2013 which was CI$393 million. To read more of an in-depth report about what is happening in the property market please read Charterland’s Cayman Property Review 2014 report from the Charterland website.

Land

Land continues to be a solid investment in the Cayman Islands. There has been a significant increase in the volume of canal front lots sold in 2014 with an increased desire for an island boating lifestyle. Also developers have resumed acquiring larger land tracts for subdivision and resort projects. Inland land remains affordable although the absorption rate is much slower than beachfront, waterfront or canal front. Care and due diligence should be taken as to the ground and soil condition of any land acquisition as this varies considerably in Cayman and can add hidden cost to future development. Potential buyers should also appraise themselves as to the location and history of the survey or boundary markers. Individual beachfront land parcels can still be found at good regional value, especially in the Eastern and North Side districts. Capital growth is expected in these areas as they remain fairly undeveloped. Overall confidence has confirmed that the Seven Mile Beach corridor has the fastest selling rate due to an abundance of activity and investment in this highly desired area. Camana Bay has boosted the quality and variety of amenities and is a wonderful example of new urbanism. South Sound has also seen a recent surge of land and developer investment after several years of calm and remains one of our most desirable residential neighbourhoods.   

Homes

A wide variety of home architectural style is available as well as a tremendous spread of price points. As of Q2, 2015, approximately 400 homes are on the market via the CIREBA Multi Listing System from CI$250,000 to tens of millions! It is best to take counsel with a knowledgeable CIREBA realtor who should know the areas, styles, and amenities to suit your desires. One may also consider building, however in many instances, better value may be found in already built homes, so make sure you invest the time to exhaust the available options before custom building unless you are very specific in your requirements.  Contemporary seems to be the mood of the moment for some of the more recently built homes, but there are also quite a lot of Mediterranean, Island and Ranch style options. Some property areas sell faster than others, thus considerable better value may be found just ten or fifteen minutes out of the George Town and Seven Mile Beach areas where the vast majority of the population works, schools are located, etc. Consideration should be taken as to the re-sale time frame of any home purchased as absorption rates can traditionally hold properties on the re-sale market for some length of time. Approximately 85 homes sold via CIREBA MLS in 2013 and 120 in 2014.

Condominiums & Apartments

A great selection of condos, apartments and town-homes are for sale across the three islands and consideration should be given to make sure your new condo home is ‘fit for purpose’. The strata by-laws should be read to ensure they meet your family requirements, i.e. pets, rentals, and management details. Also strata or condominium fees should be reviewed to understand if any assessments are pending, insurance payments have been factored in, etc. There are complexes available from three units to much larger developments with a variety of amenities.

Seven Mile Beach sales have seen a significant increase, (nearly double) in the volume of transactions in the last year. Luxury residences have set new benchmark pricing and a very high level of finish. As of Q2, 2015 there are 84 condos available on Seven Mile Beach from US$350,000 to $12 million. Some developments have full time property managers and tourist rental programmes and others are private for owners and guests. A wide choice is available from small quiet modest units to ultra fine apartments in WaterColours, the Ritz-Carlton and the new Kimpton Hotel to name just a few. Good research must be done!

Significant ROI investments are made in Cayman condos, as we benefit from a buoyant local full time rental market with many residents to our shores on work permits with the need for accommodation. Generally speaking, better cash flow returns are available ‘off the beach’ with lower fees and annual lease terms, however this obviously means that one is buying purely for return and not to use personally. Another way of covering costs whilst making a real estate investment is to rent short term when not in use. Different properties match the various buying requirements.

In 2013, approx. two hundred condos, apartments and town homes were sold through CIREBA, in 2014 there were three hundred sales showing a large increase in activity which continues into 2015.

Aside from Seven Mile Beach, there are also approx, four hundred other options available in our islands from one to four bedroom, with inland, canal, water or beach views, all with differing styles, amenities and management. Pricing varies from CI$100,000 to $2 million. 



The Cayman Islands Real Estate Brokers Association (CIREBA) 

The real estate industry in the Cayman Islands today is dramatically different than the 1970s and 1980s, when the industry was in its infancy. During those early years, the real estate companies were not organised as effectively and efficiently as they are today, nor were they so plentiful. In 1987, the industry was transformed by a group of realtors who agreed to form the Cayman Islands Real Estate Brokers Association (CIREBA). CIREBA is a not-for-profit association based on the North American style of relationship between realtors and clients but adapted to work within the UK-based legal system of the Cayman Islands. One of the Association’s founding objectives is to “improve and elevate the general knowledge of persons engaged in the real estate business.” Today, CIREBA is proud to boast that it has 31 member companies and 157 sales agents in the group (as of Q2 2015). This makes up the majority of all realtors in Cayman.  The vast majority, nearly 90% of all real estate transactions (excluding government acquisitions) are negotiated using a CIREBA broker.

To be a member of CIREBA, agents and brokers must complete a professional training programme which, amongst many subjects, encompasses business ethics, due diligence requirements and some contract law. A high degree of competence is expected from all CIREBA members and they must adhere to a strict code of ethics established by the Association.

CIREBA members input listing data into the Multiple Listing System (MLS), providing a central data source of information for its members to provide convenient shopping to prospective purchasers. The basic premise of the MLS is that all CIREBA member firms have agreed to share their property listings and work together on any real estate transaction. This means you can view and buy any property through any CIREBA agent, not just the listing broker or agent.

CIREBA'S Statistics - August 2015

The CIREBA Multiple Listing System, as of 25th August 2015, shows that there are 1,649 properties listed in the CIREBA MLS having an aggregate value of CI$1.29 billion. The number of listings is down from 2,049 when compared to the same time last year; and the value of listings has reduced by some 500 million. It is encouraging that the volume of sales for the first half of 2015 shows 418 transactions with a value of CI$267 million. This represents an increase of 101 transactions with a value of CI$77 Million. CIREBA’s strength in the industry is highlighted by the fact that its member companies handle 85% of the sales volume in the Cayman Islands.



Online Property Search

If you prefer to conduct your real estate enquires and searches independently, there are online resources that you can use to find real estate listings as well as useful information about purchasing property in Cayman.

CIREBA
Tel: (345) 949 7099
www.cireba.com
CIREBA is a not-for-profit association based on the North American style of relationship between realtors and clients but adapted to work within the UK-based legal system of the Cayman Islands.  CIREBA is proud to boast that it has 31 member companies and 157 sales agents in the group. The CIREBA website has a comprehensive listing of commercial and residential properties in the Cayman Islands.

easyCayman
Tel: (345) 749 2436
www.easycayman.com
easyCayman is a one stop shop for all your property needs; an independent online portal for buyers, sellers, renters and real estate professionals. With comprehensive descriptions, map views and key information, you’ll find all you need to know about the Cayman property market in one location. easyCayman provides custom search options, mortgage calculators, comparative listings, as well as information on Cayman realtors and other useful tools.

Legal Overview

The real estate market in Cayman is simple and straightforward. Apart from a one-time stamp duty, there are no annual property taxes or restrictions on foreign ownership by individuals and title is granted and guaranteed by the Cayman Islands Government. Title to land is recorded in a modern, reliable and centralised land registry, where every plot of land is mapped and given a descriptive title number based on location. Any encumbrances such as mortgages, rights-of-way and cautions pending contract are recorded on the title register of that parcel of land. Vacant land can be owned and held for future investment potential. To date, Cayman real estate has proved to be an attractive and profitable investment. Owning land in the name of a corporation is possible, but strict rules apply and a lawyer’s advice is essential.

Buildings are subject to a series of planning permissions and building permit approvals. These are monitored by the Cayman Islands Central Planning Authority and Building Control Unit, which carries out plan reviews and onsite inspections that relate to site, building, plumbing, mechanical and electrical works. There are also requirements for structural engineers to take into consideration seismic design principles depending on the building heights and purpose of the building. Construction materials have to be imported and are subject to duties that range from 15%-22% on the landed value (which includes duty on the shipping costs). Consequently, the cost of building is considerably higher than in places where materials are more readily available. Go to the Building in Cayman chapter for a detailed guide on building a residential property in the Cayman Islands as well as a list of building professionals in Cayman.
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