Key Highlight
- Prices looking up while sales and volume are down
- Residents waiting for tourism to return
If you and/or your clients are looking for an island paradise to recharge, the Cayman Islands may be just the ticket. This spot on the world’s map is well known and super desired as one of the most beautiful island retreats AND, because it is a British Overseas Territory, the Caymans has nearly no taxation.
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Up until the coronavirus onslaught, vacation-home prices were rising at an average clip of +15% a year. Most recent data from the Cayman Islands Real Estate Brokers Association (CIREBA) tell us the average home price in 2019 was some $942,000 and $1.16M in 2020. During the pandemic, sales fell from 512 in 2019 to 358 through 2020. Total value generated from those sales generated approximately $343M in 2019 and $311M through November of this year.
Pending sales, according to James Bovell, the broker and co-owner of RE/MAX Cayman Islands, will outmatch those in 2019 and that “…the real estate market will in fact exceed its figures in 2019…(as) the real estate market has increased by approximately +30% as a direct result of increased tourism.”
On the one hand, Jeanette Totten, a broker with ERA Cayman Islands, said, “People who own here are very wealthy, so this is a second, a third, a fourth home…this is part of their portfolio and they’re just holding onto it…so prices haven’t dropped.” On the other hand, Totten also said that the some 50% of 65,000 residents who rely on rental income (according to the Cayman Islands Economics and Statistics Office) are “…feeling the need to sell.”
In addition to almost no taxation, the Caymans welcomes foreign buyers with no restrictions on foreign ownership and title guarantee by the government. Bovell said that his firm’s buyers are split down the middle with foreigners and locals but that foreigners represent some 70% of sales value. “Our foreign buyers come from primarily the United States and Canada, followed by the UK.” Just prior to the pandemic, potential buyers from India, Hong Kong and Monaco were asking a lot of property questions.
Buyers hire an attorney and a notary to consummate sales and pay a stamp duty of 7.5% of the property’s purchase price. Sellers pay commissions ranging from 7% on properties priced under $500,000 and 4% on properties priced over $10M.
Did I mention that the Cayman Islands has nearly no taxation?
Thanks to The New York Times International Edition.
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