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Crighton Properties | February 13, 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.
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.
With an impressive wrap-up, the real estate market of Cayman showcased three major trends —
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.
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.
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 $382,351,182.
These figures exhibit plenty of opportunities for keen buyers to secure a luxurious retreat in this robust market.
2023 turned out to be as incredible as we expected! We were fortunate enough to assist numerous clients in their real estate endeavors with our extensive knowledge of the Cayman market and constant dedication. Like every year, this marvelous year too, we aimed to enhance the client experience and made sure their aspirations were not only matched but exceeded.
Looking ahead, we strive to navigate the real estate journey of our clients to excellence and turn their dreams into realities.
Since 2023 turned out to be an exceptional year, real estate experts were optimistic that 2024 will showcase continued growth — and they weren’t disappointed.
Quarter 1 of 2024 in the Cayman Islands kicked off with a strong momentum, setting the stage for another flourishing year. The market demonstrated a steady demand for properties, including the high-end sector which was relatively active compared to last year.
Mid-segment residencies and budget friendly homes were off to a slow start and what’s interesting is that lending rates and cost of living remained unchanged yet potential buyers expressed their interest in purchasing the properties.
Several factors contributed to this heightened engagement includes:
Here’s what Q1 looked like
Q1:2024 | Total Value Sold(USD$) | Number of Sales | New Listings |
Jan | $94,545,480.45 | 58 | 192 |
Feb | $77,872,359.24 | 77 | 117 |
March | $98,619,534.88 | 84 | 111 |
Total | $271,087,374.57 | 219 | 420 |
Difference | 44.47% | 73.81% | 52.17% |
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
First Quarter 2024 | Second Quarter 2024 | ||||||||
Q and Q | Jan | Feb | March | Total | Apr | May | June | Total | A |
New Listings | 191 | 118 | 143 | 452 | 131 | 193 | 100 | 424 | -6% |
Sales | 58 | 80 | 98 | 236 | 82 | 76 | 58 | 216 | -8% |
Value Sold | $94,595,480 | $96,922,359 | $112,444,035 | $303,961,874 | $98,169,797 | $95,009,155 | $76,696,581 | &269,875,533 | -11% |
Residential Days to Sell | 336 | 284 | 282 | 301 | 221 | 249 | 255 | 242 | -20% |
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:
The number of new properties announced to the Cayman real estate market during Q3 of 2024 decreased slightly, with 345 properties announced to the market vs. 388 in the same period of 2023. However, sales activity increased significantly, with 176 transactions registered in Q4 2023, an increase of 18% from the previous quarter, recorded as 149 sales in Q3 of 2023. This uptick suggests strong demand despite tightening supply.
Financially, the market’s vigour was evident, with US$262 million in properties going under contract, a 5% increase from Q3 of 023. At the end of September, the year-to-date sales volume hit US$743 million — putting the market on pace to break the US$1 billion threshold for the first time.
The most notable action this quarter was the Federal Open Market Committee's reduction of the funds rate by 0.5%—the first cut in five years.
The immediate fallout on the Cayman real housing market was subtle, but such rate cuts can only be good for asset values and might fire up increased investment.
Here’s what Q3 looked like:
Month | Total Value Sold(USD) | Number of Sales | New Listings |
July | 85000000 | 58 | 120 |
August | 90000000 | 60 | 115 |
September | 87000000 | 58 | 110 |
Total | 262000000 | 176 | 345 |
In the final quarter of 2024, the positive trends carried on, and the Cayman Islands real estate market outperformed even the most optimistic forecasts. By the end of the year, active listings numbered 1,855, with a total value of around US$3.46 billion. Overall, at the end of the year, were 1,362 properties listed, with a total estimated worth of US$2.22 billion.
Sales transactions stood at 809, gathering US$960.79 million, and 671 properties valued at an estimated US$985.53 million remain under contract, signalling investor confidence.
Residential properties were the runaway leader, with 1,316 active listings averaging US$2.04 million each. Most notably, sought-after areas such as Seven Mile Beach and West Bay Beach North commanded premium pricing, with average listings at US$5.75 million and US$6.76 million, respectively.
The land segment was also increasingly promising, with 478 active listings priced at an average of US$1.27 million, appealing to developers and private investors.
Here’s what Q4 looked like:
Month | Total Value Sold(USD) | Number of Sales | New Listings |
October | 92000000 | 62 | 125 |
November | 96000000 | 65 | 130 |
December | 101000000 | 58 | 135 |
Total | 289000000 | 195 | 390 |
Interest in the luxury segment surged in Q4 from international buyers of second-home vacation properties or profitable rental investments. It was buoyed by expectations of interest rate changes and the arrival of Cayman's high season, which has historically brought wealthy buyers.
During 2024, Cayman Islands property prices experienced a general increase due to the strong demand for all types of property. A healthy balance between new listings and transactions was observed, highlighting the market's stability where new listings matched completed transactions closely.
The time properties spent on the market reflected the gruelling nature of high-value transactions.
This sector engages in slower decision-making, with commercial listings taking 528 days to close and residential listings taking 498 days (also average).
Looking ahead to 2025, the Cayman Islands real estate trends suggest a continued robust market bolstered by the islands' enduring appeal, economic stability, and thriving tourism sector. Investors are advised to stay attuned to global economic indicators and local policy developments to capitalise on emerging opportunities in this dynamic market.
To sum up, the second half of 2024 reaffirmed the Cayman Islands' status as a robust and appealing real estate market, with diverse opportunities for investors and a positive outlook for the future.
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.
The primary trends include:
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.
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