Cayman becomes a buyers’ market
Cayman Observer : Issue 143 : 31 May – 6 June 2007
RE/MAX broker Kass Coleman tells Wendy. Ledger that prices may be coming down, but the window
of opportunity for buyers will not be open forever.
With prices more negotiable than they have been for sometime, one experienced real estate agent
says this is a good time to buy. A greater choice in the types of properties and the locations available
and far more price flexibility are combining to offer great
opportunities to genuine investors - but it may only be for a short time. RE/MAX broker Kass Coleman
says that while there is some stagnation in the local property market, buyers should seize the
opportunity to negotiate a better price for the property they want.
Although confident that there is little fundamentally to worry about she believes there are a number of
factors at work that are affecting the current market activity and prices.
One of the main problems she believes that local banks do not do enough to stimulate the market.
“Contrary to just about every other western economy, our banks do little to encourage people to invest
in property and demand for deposits are unrealistic, it gives the impression that they are just not
interested, Coleman says.
For example; a 30% deposit for mortgage applications is too high for most people moving to the
Cayman Islands. Such a requirement makes buying a home prohibitive for a lot of potential
homeowners especially when set against all the other upfront costs involved in the purchase of a
property. “We need to see that percentage rate come down to 15% or 20% to facilitate the market for
expatriates coming to work here.”
She believes that most executives moving to Cayman, even for only a few years, would prefer to
purchase rather than rent. On average, she says many could spend some $90,000 in rent over just
their first three years here, so investing in property is a wise move. Having to find such a large
percentage upfront, however, deters too may potential buyers, Coleman says.
This, coupled with high interest rates, significant insurance costs, stamp duty and an increasing cost
of living without the matching salary increases is making life tighter for many people, all of which is
contributing to the current stagnation in the market.
Echoing comments by RE/MAX colleague Kim Lund last week, Coleman says that the increase in
cruise tourism, alongside a relative decline on pre-Ivan levels in stay over guests, is bad for both
realtors’ businesses and the country’s economy as a whole.
The low stay over figures are one of the legacies of September 2004’s Ivan, an event that Coleman
believes is still affecting the country’s real estate industry.
“Ivan cost a lot people a lot of money and we are only just beginning to regroup as a result,” she says.
The storm had a major impact on property prices, with those left standing and for sale experiencing
big price rises. Coleman believes that some of the price reductions witnessed now reflects the market
finding its equilibrium once again.
She notes, however, that there have been a number of positive improvements to the island's property
stock as a result of extensive post-Ivan renovations.
The continued development of land, something that some agents are beginning to raise concerns
over, is not necessarily problematic, Coleman notes.
But she warns developers that they need to build the right type of properties at the right prices so as
not to add to those sectors of the market which are already flooded.
She says there is an abundance of some inland town houses and condominiums in the $200,000-
$300,000 bracket.
But when it comes to luxury and/or oceanfront properties, she sees little evidence of a slowdown
arguing that Cayman is still an attractive option for overseas investors and a retirement destination for
many high net-worth individuals.
Over the long-term, she believes that homeowners have little to worry about and anyone who has
time to sell will no suffer any significant losses.
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