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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.
Market Trends of 2023
With an impressive wrap-up, the real estate market of Cayman showcased three major trends —
Cautious Optimism
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.
While it was also observed some real estate patterns post covid were going back to normal, like traditional ways of purchasing 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.
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.
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.
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.
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.
Real Estate Predictions for 2024
Since 2023 turned out to be an exceptional year, real estate experts are optimistic that 2024 will be a flourishing year, too! Projections suggest that an average of 12 people will be relocating to Cayman every day. This migration is credited to professional opportunities offered by small businesses, legal services, and expanding the construction industry. The foreseeable 2024 also highlights the elevation of Cayman’s infrastructure, including public, residential, and commercial projects.
As promising as the scope is, experts also suggest being on your toes for the potential hurdles one may witness in 2024. The possible obstacles include inflation and high interest rates, particularly for mortgage seekers, which can lead to slowing down the demand for residential properties, thereby increasing the cost of living.
Juliana O’Connor-Connolly adds the real estate industry of Cayman will grow moderately. The growth rate is expected to increase by 0.8%, relatively higher than in 2023. On average, it will be increased by 2.1% from 2025 to 2027. As for the inflation rate, it is projected to grow by 5.2%, with an average of 2.2% annually between 2024 and 2027.
They say to look forward to acquiring real estate, although be mindful of these challenges to navigate the landscape seamlessly.
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.