Sustained demand during a global pandemic has pushed the average Cayman Islands house price closer to the US$1 million landmark.
Like many places in the developed world, the Cayman Islands real estate market braced for serious trouble when the global coronavirus pandemic and lockdowns hit in 2020. Like many places in the developed world, what we actually saw was increased demand, rising prices, and faster sales.
Analysis of statistics collected by CIREBA (Cayman Islands Real Estate Brokers Association) shows that the number of properties sold in 2020 was down almost 17.5% at 686 transactions versus 831 in 2019. However, total sales volume was up more than 4% year-on-year to a record US$ 666 million.
The Cayman Islands is set in 2021 to achieve the dubious milestone of the $1 million average house price, which reached US$ 971,546 in 2020, a huge 26.3% increase over 2019. This number is certainly distorted by the proportionally high number of multi-million dollar sales at the luxury end of the market, with a record 25 sales of properties valued at more than US$ 5 million, realising US$ 214 million, almost double the value of high-end properties sold in 2019.
As closed borders, travel restrictions, social distancing, and working from home became the new normal, we adopted remote viewings and video meetings to cope with the restrictions. The demand for property for sale in the Cayman Islands arrived in numerous forms: families forced to stay together 24/7 realised a lack of space and privacy and looked to upsize; people in high-density areas looked for more social distancing space to avoid infection; the globe-trotting wealthy looked for a safe island bolthole where they could sit out the pandemic; investors, as always, looked for a safe and profitable investment.
The result was increased interest in the Cayman Islands property market, and the traditional off-season drop in activity in August and September just didn’t happen, with 151 properties sold during this time, versus 126 in 2019.
As in previous years, the majority of available properties in 2020 were residential, 80% of them condominiums. The monthly average of active listings in 2020 totalled 1,540, up 4.6% in 2019, but has been declining since peaking in August and by the end of the year stood at 1,477. To some analysts, this shows a tightening of availability, despite several new developments being planned or expected to come onto the market in 2021.
Overall, the prospects for 2021 are that prices will continue upward in an anticipated tightening of the market due to increasing overseas demand and an undersupply of new luxury homes for sale in the Cayman Islands. In 2020, fewer new-to-market properties entered the market – 206 fewer than in 2019, a drop of almost 14%.
Rising prices and tightening availability point to a bump in rental prices, but so far, that hasn’t happened. The pandemic and subsequent border closures decimated the tourist economy and forced around 5,000 overseas workers to return home, resulting in a surplus of available rentals and softer prices. Some owners of income properties have also switched their focus from short-term holiday lets to long-term tenants, further adding to a surplus that is likely to last as long as global pandemic restrictions are in place.
The trend for 2021 says that despite continued travel restrictions and quarantine rules, the Cayman Islands continue to attract real estate buyers as a safe place to live, invest and, in an increasing number of cases, isolate from the wider world. Until then, the median price for rentals should hover around the US$2,000 per month mark, about the same as in 2019.