Luxury property still in demand says report
(CNS): According to a report from Global Property Guide while average housing prices in the Cayman Islands have experienced double-digit declines over the last twelve months luxury beachfront properties are still in demand. Primary factors affecting prices the report said was “a substantial decline in residents” because of a drop in foreign work permits. House prices are down 15% on average in 2010 but the report claimed that beachfront homes priced between CI$900,000 and CI$1.2 million and condo waterfront properties ranging from CI$600,000 are selling well. There was a 13.8% drop in the number of property transfers, and a 15% decline in the total value of transfers in the first half of 2010.
“With these people leaving the island there is a dramatic decrease of rental properties needed,” says Jeanette Totten, owner and broker at Cayman Luxury Property Group. “Many of town homes are sitting empty with either developers not being able to sell them or owners not being able to rent them.”
The report reveals that lending rates have remained at record low levels. In June 2010 therate was 3.25%. As a result it said the mortgage market expanded to 55% of GDP in 2009, from 48% of GDP in 2008. Domestic property loans in the first half of 2010 rose 3.0% compared to the same period last year.
The maximum loan-to-value (LTV) ratio is 70% of the property’s appraised value, with 10 to 15 year loans typical. Recently, some lenders have offered up to 30 to 40 years to Caymanians. The minimum loan amount is CI$300,000.
The report also suggested that Grand Cayman’s two major developments -the Ritz-Carlton at Dragon Bay and Camana Bay- each worth $500 million will have significant economic impact along with Dr Shetty’s Narayana Cayman University Medical Centre which is expected to bring in “millions of dollars,” the report said.
Category: Business
I am wondering whether the statement "House prices are down 15% on average in 2010 " is based on the fact that the total value of transfers also declined by 15%. I would suggest that these two are not the same. If you sell more lesser priced properties one year and more high priced properties another year, the value of transfers would invariably go up but that does not mean that the prices of the homes themselves also went up.
I also refer to the Global Property Guide article (http://www.
) which states:
The average sales price for condominiums was CI$294,028 (US$367,535) for January to July, and CI$223,907(US$279,884) for July to September, according to the Cayman Islands’ Lands and Survey Development
2010 statistics. For residential properties, the average sales price was CI$256,713 (US$320,891) for January to July, and CI$353,739 (US$442,174) for July to September.
So it appears that while condo average prices have declined, average prices for residential homes have actually increased.