Cayman Property Review 2010 Featured on Cayman News Service

(CNS): The local property market fell by a further 30%, a new local industry report has revealed. The Cayman Property Review, by chartered surveyors Charterland Ltd, billed as an independent review, reveals that residential property sales in the Cayman Islands have fallen to the lowest levels since 1995. In the introduction partner Simon Watson says that in a year labelled “horrific” by the real estate sector, there is a need for accurate, impartial information about the industry. With only 1,015 sales in 2010 compared to 1,443 in 2009, the total sales value has also fallen by 36%, from CI$404 million in 2009 to CI$259 million in 2010, the report states. However, the authors conclude that the average value of individual property has not fallen as much as some feared.

“Based on the figures, there can be no question that the market for properties in the Cayman Islands continued to stagnate in 2010, following on from the declining number of total sales in the preceding three years,” the authors write. Pointing out that, although it is difficult in a market as small as Cayman’s to identify trends by examining every market value sale, Charterland Ltd said it was still able to point to some important and useful information

“When the average value of the total sales for the year is calculated, the first thing of note is that, although there is a decrease when compared with the average value in 2009, the drop is significantly less when compared with the decrease in the total number of sales, or the total value. 2010 saw the average value of all transfers for market value fall from CI$280,000 to CI$254,000; a total drop of just over 9% from the previous year.”

The figures suggest that although the market has stagnated in terms of numbers of sales, values overall have not taken the dramatic decrease that many in the industry feared, the report states.

“It would seem that sellers are choosing to hold-off on selling their properties, where they are able, pending a market recovery, rather than take a loss in the current market,” the authors speculated, saying that the lack of significant individual property sales further demonstrates that sellers are holding off putting properties on the market.

“The largest single transfer, in value terms, was the sale of the site of the Tortuga Duty Free Store in central George Town, for CI$3,666,600, equating to approx. CI$526 per square foot (SF). In fact there were no transfers registered with sale prices of more than CI$5 million in 2010, compared with six properties in 2008 and one sale for more than CI$10 million in 2009,” the report states.

The highest priced condominium sale in 2010 was for a unit at the Caribbean Club, which sold for CI$2,436,000.

“It is interesting to compare this with the highest rate per SF for a sale in Caribbean Club of CI$997 per SF in 2008. The fifth highest valued sale of the year was another condominium sale, this time in The Meridian. This 3,700 SF unit sold for CI$2,335,200 or CI$631 per SF. This price compares well with two other sales of 3,700 SF units in The Meridian which both sold in 2007 for prices equating to CI$598 and CI$641 per SF.”

Most of the property sales in 201 were for less than a quarter of a million, the report states, with less than 5% of sales being over a million.

“Overall, just under 65% of the overall sales in 2010 were for sales prices of less than CI$250,000, a fraction over 20% of the sales were for sale prices between CI$250,000 and less than CI$500,000, whilst 5.6% were for between CI$500,000 and less than CI$1 million and 4.4% of sales were for prices of more than CI$1 million and less than CI$5 million,” the surveyors say.

Contrary to the believe that Cayman’s real estate business is driven by foreign investors and overseas visitors, the report reveals that 90% of all purchasers in 2010 were registered with Cayman Islands addresses. The remaining 10% of sales were made by people with addresses in the United States, Canada, the UK, Europe and the Middle East.

On Seven Mile Beach, where purchasers are generally believed to be overseas investors, 67% were also purchased by people with Cayman addresses. 20% of all sales on SMB in 2010 were to purchasers from the USA. On Little Cayman, however, only 32% of the purchasers had registered a local address. But on Cayman Brac 94% of all purchasers in 2010 had registered addresses in the Cayman Islands and all other purchasers were from the US.