A Closer Look at the Cayman Real Estate Market in 2024

Much like the Caribbean tides, the Cayman Islands real estate market has witnessed its fair share of highs and lows. Despite facing challenges, including the global catastrophe COVID-19, it made a roaring comeback by the end of 2022, marking the market valuation at US$899 million, relatively close to US$967 million in 2021.  

Since the surge, the Islands have created a buzz, attracting investors to secure a property. At the same time, potential investors eagerly await a comprehensive view of the captivating growth of the real estate market in 2023, including prevailing trends, irresistible investment opportunities, challenges that shaped the industry, and what 2024 holds for property investors.

Today, this write up will draw a vivid picture of the resilient, adaptive, and enduring allure of the Islands in 2023 while showcasing the promising prospects of 2024. 

How was the Cayman Islands Real Estate Market in 2023?

Be it residential or commercial, the real estate market in 2023 continued to remain stable. During the initial 3 months, 411 new properties were listed in the market, out of which 160 properties were sold, heading south compared to quarter 4 of 2022, which was 235 properties.

However, in the second quarter, the real estate market picked up the pace and raised to 26.7%, which is $242,420,994 and 203 sold properties. In fact, 407 new listings were introduced, exhibiting a decline of 1.5% in contrast to the 
first quarter.

In the 3rd quarter, 160 properties were sold, making $229,400,813 in volume, leading to 124 pending listings. July, August, and September are considered less active as the islands are not bustling with travelers compared to other periods. Such inactivity impacts the overall sales, including real estate purchases.

During the inaction, the real estate market saw 376 new properties, which is the lowest number of listings from the previous two quarters.

The end of the year brought a pleasant surprise, with an average value of sold properties reaching 1,303,322.87. The inventory highlighted a total of 1,396 active listings, including land, residential, and commercial. This painted a picture of unprecedented growth and opportunity in the real estate landscape of Cayman.

Market Trends of 2023

With an impressive wrap-up, the real estate market of Cayman showcased three major trends —

• Cautious Optimism 
• Interest free payment plans
• The increased demand for land

This trend was about making cautious investments while having faith in the real estate market. Earlier in 2023, we saw that the market dealt with unexpected situations such as rising interest rates, declining GDP, delays in closing a deal, and strategic thinking and planning for an extended time.

1. Cautious Optimism

While it was also observed some real estate patterns post covid were going back to normal, like traditional ways of buying properties, stabilization in transaction volumes, balanced supply and demand, and renewed investor confidence.

Experts suggested staying composed, rising above the expected property downfalls, and being patient to expect fruitful outcomes.

2. Interest Free Payment Plan

Another real estate trend of 2023 was interest free payment plans. In 2023, numerous buyers, especially the ones seeking financial support, took a closer look at the market conditions and trends before making a purchase.

Although, many brave buyers considered this an opportunity and invested in properties, assuming they would get access to a larger inventory, less competition, and favorable deals.

Considering the rising interest rates in mind, a few developers in Cayman offered zero interest payment plans for upto 5 years.

Although high end properties such as luxurious villas, grand mansions, and contemporary beachfront properties were not affected by the rising interest rates as the potential buyer purchased the property in full cash.

3. The Increased Demand for Land

Throughout 2023, the demand for land remained a hot topic among potential individuals eyeing land acquisition. Real estate experts stated that the land would be a sizzling trend, and the only aspect that could halt this is if sellers stopped listing their land on the market.

In 2023, many buyers rushed to purchase the landsland because they were relatively affordable assets compared to investing in single-family homes or condos, resulting in elevated demand for land.

Also, investing in Cayman land will be a good choice in 2024 as it offers opportunities for growth and long-term value.

Impact of Global Factors, Challenges and Solutions

As real estate experts predicted, 2023 had a slow start because of rising interest rates, global economic uncertainties, and predicted regulatory changes caused by the rise in the price of construction materials and disturbance in the supply chain because of the Covid 19 lockdown.

In fact, many vendors reduced their properties' prices, considering economic realities. However, the experts emphasized the importance of financial preparedness and advised potential investors to be sensible and consider the future before making an investment. 

Also, real estate agents help clients overcome challenges throughout the property buying or selling process.

Investment Opportunities & Luxury Market Insights

Even though single family homes saw a diminished value by 15% than the preceding year, it still added a momentous contribution of US$267 with the transaction of 126 properties.

Apart from the soaring land demand, luxury residences continued to stay at the top as the most desirable real estate in 2023. A total of 459 units were sold in the year, among which condominiums emerged as the popular front runners. Around 307 condos were sold in 2023, making the sales volume of US $382,351,182.

These figures exhibit plenty of opportunities for keen buyers to secure a luxurious retreat in this robust market. 

How was 2023 for Crighton Properties?

2023 turned out to be as incredible as we expected! We were fortunate enough to assist numerous clients in their real estate endeavors with our extensive knowledge of the Cayman market and constant dedication. Like every year, this marvelous year too, we aimed to enhance the client experience and made sure their aspirations were not only matched but exceeded.

Looking ahead, we strive to navigate the real estate journey of our clients to excellence and turn their dreams into realities. 

Real Estate Market of 2024: Overview of Q1 and Q2

Quarter 1:

Since 2023 turned out to be an exceptional year, real estate experts were optimistic that 2024 will showcase continued growth — and they weren’t disappointed.

Quarter 1 of 2024 in the Cayman Islands kicked off with a strong momentum, setting the stage for another flourishing year. The market demonstrated a steady demand for properties, including the high-end sector which was relatively active compared to last year.

Mid-segment residencies and budget friendly homes were off to a slow start and what’s interesting is that lending rates and cost of living remained unchanged yet potential buyers expressed their interest in purchasing the properties.

Several factors contributed to this heightened engagement includes:

• A diverse range of buyers have penetrated the market who were more enthusiastic about securing properties in comparison to others who couldn’t buy previously.
• Sellers might have been more flexible to negotiating the overall value of their residential spaces, grabbing the attention of substantial buyers.
• Purchasers are comfortable with existing interest rates and are willing to buy a desired property.
• Numerous buyers are tired of prolonging the buying process and have opted to move ahead, regardless of the market conditions.

Here’s what Q1 looked like

Quarter 2:

While Q1 highlighted impeccable results, Q2 on the other hand witnessed a decline in property demand and plausible reasons were high interest rates, low supply, inflation, hefty lending rates, and expensive standard of living.

Below is a detailed picture of Q1 vs. Q2 of 2024

As you can see, sales and new listings dipped significantly in the second quarter, but at the same time, properties were sold faster, indicating buyer commitment even with elevated interest rates.

Breakdown of market segment performance:

• Affordable properties: Starter homes experienced a major impact in their requirements because of high interest rates and inflation.
• Mid-scale properties: This segment saw a small percentage of growth as compared to mid scale properties because of huge lending rates and property costs.
• Luxury properties: Like every quarter, this one, too, was proven to be successful for luxury properties.
• Pre construction: This real estate segment did not reach remarkable heights due to location and supply chain issues. While some projects are extending their timelines, the potential for future developments remains strong and buyers are looking for well-planned investments.
• Land: While land sales haven't stopped completely, they have slowed down. This is due to a shortage of contractors, rising labor costs, and the high expenses of holding onto undeveloped land, combined with current interest rates.

Forecast of Q3 and Q4

The Cayman Islands real estate market will observe continued price appreciation throughout Q3 and Q4 of 2024, driven by several fundamentals.

Demand for properties will remain robust, particularly in residential, commercial, and undeveloped land sectors. Although, inventory constraints are likely to persist, further pushing property prices upward due to limited supply.

On a positive note, interest rates are likely to diminish slightly by the end of the year, potentially enhancing buyer activity and making it seamless for new investors to make their way in the market.

Meanwhile, sellers may become more adaptable during the latter half of the year, reconsidering their expectations and showing openness in negotiation.

Frequently Asked Questions

1. How did the Cayman Islands real estate market perform in 2023?

2023 was quite stable, regardless of some global challenges. While the first quarter was pretty slow, the market picked up in Q2, with a solid preference for land and luxury properties. The year ended with notable growth in property sales and an average sold property value of $1.3 million.

2. What are the key trends shaping the Cayman real estate market?

The primary trends include:

• Cautious optimism
• Interest-free payment plans
• Increased demand for land

3. How are high interest rates impacting the real estate market?

While high interest rates have slowed down the need for starter and mid-range homes, luxury properties remain unaffected, as buyers tend to purchase them in all cash. Although, interest rates will decrease moderately in Q3 and Q4 of 2024, which may encourage more market activity.