Projects needed to lift market
(CNS): With 2010 one of the worst in recent times in terms of real estate sales for the Cayman Islands, brokers across Grand Cayman are predicting a slight upswing this year, but warn that plans by government to lift the economy need to take effect to make it happen. Kim Lund, Owner/Broker with RE/MAX, said that 2011 will still be another slow and painful year for real estate sales, as the tepid US economic recovery starts to slowly have some impact in Cayman by mid 2011. “Sales should start picking up this year but it will only be the very best properties with the most beaten down prices that sell. There will be precious few properties that actually sell for market value in 2011,” he confirmed.
Lund said there are two viable possibilities for the big real estate story of 2011. “One is a mega resort for the hundreds of acres currently owned by Thomas Enterprises, north of the CI Yacht Club. New financing has recently been put in place on this property, indicating there may be some activity brewing. The other is a boom of resort development, just north of the public beach on West Bay Road, if government agrees to move West Bay Road back to the east, so that it runs behind the vacant Courtyard Marriott Hotel. This would vastly increase the amount of developable beachfront on Seven Mile Beach,” he stated.
Following announcements last week, Lund’s wishes may well come true as the premier told the CBO on Thursday that the road is very likely to be moved now that Dart have purchased both the land and the Courtyard Marriot. However, the Camana Bay developer has not offered a timeline for developing the area and has described it as a future opportunity.
Regardless of the situation concerning the Courtyard Marriot, RE/MAX broker Kass Coleman says that everyone from their RE/MAX office feels that 2011 will be a minimum of 10 to 40 per cent better than last year and the year before. “Buyers feel the fog has cleared and they are making decisions and getting on with their real estate planning and purchasing,” she said.
Although optimistic in the long term, Mike Joseph, also a broker with RE/MAX, feared the downturn in the industry had not yet passed Cayman by.
“The instability and uncertainty in many respects, locally and internationally, have been very influential despite the opportunities created in a recessionary market. Simultaneously the market believes that prices will drop further and are waiting for new opportunities this year. 2009 and 2010 saw reductions in pricing in many of the sectors of the local property market yet the number of transactions were still suppressed,” he confirmed.
Not only have North American investors (traditionally Cayman’s biggest market driver for real estate) been nervous about spending during a recession, but the contraction in Cayman’s population has also hit the real estate industry hard.
Joseph explained, “The contraction in population has negatively affected the rental market for landlords/property investors and in turn developers who have been left with completed but unoccupied units. Sales prices therefore have been reduced in order to generate sales and the local residents are seeing these opportunities but with a continued lack of confidence, they have still remained apprehensive to purchase.”
Joseph believed that the slew of projects waiting in the wings will kick start investment in real estate.
“We need to see certain developments and projects, ideas and concepts break ground,” he said. “Delays create more uncertainty. We need the new cruise berthing to start, the runway to be lengthened, the Shetty Hospital to proceed, along with other projects. Collectively these add value to the Cayman product and in turn will encourage activity once more.”
Joseph says the industry itself has been working hard to generate business. “The good news is that we haven’t been sitting still waiting for the storm to pass us by, the local industries and representatives have been actively reviewing and considering how to weather the storm short term and importantly how to emerge with wind in our sails. CIREBA has been and continues to consider our collective new reality, the Chamber of Commerce has been integral in creating a public-private cross aisle review with the Future of Cayman Forum.”
Sheena Conolly, Owner/Broker with Sotheby’s International Realty, Cayman Islands said that the investment climate has changed and some have recognised that prices have dropped considerably and that now is a good time to buy.
“We are seeing signs from executives who are already established in Cayman, looking to move up the property ladder to capitalise on the down market. Interest rates have remained low and once potential buyers feel comfortable that Cayman is home and they have a reasonable sense of tenure, they are surely smart to buy now,” Conolly confirmed.
She said that overseas vendors who really need to sell are now pricing more competitively than before to move the real estate asset.
“Historically there was rarely the same urgency or financial need to sell, as the Cayman property could rent if needed. Times have changed.”
She added, “Confidence is everything, and once Cayman starts to get active with some new projects like Dr Shetty’s hospital, the George Town cruise terminal and others, there could quickly be an upsurge of positive activity – and on these small islands, the trickle down effect can flow quickly.”
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Category: Business
Grand Cayman is over-built. The real estate industry has been creaming it in for years, and now needs to sit back and wait for the island to catch up with what has already been built. The habitual premise that building more sub-divisions or mega projects will save us from poverty needs to be addressed, because it won’t. The wealthy will continue to watch their money closely, and the brain drain will also continue. The sediments need to settle before we take any more overt action in regards to our mantra "develop, develop, develop and to hell with the consequences."
Here is an extract of what APNews service said today as to the cause of the economic meltdown in the USA :
http://apnews.myway.com/article/20110127/D9L0UQ7O4.html
FCIC Chairman Phil Angelides told reporters that the group “fulfilled our obligations and referred matters to the appropriate authorities.”
The conclusions contradicted a parade of witnesses in the panel’s hearings who said the crisis couldn’t have been avoided or prevented. Federal Reserve Chairman Ben Bernanke and Goldman Sachs Group Inc. CEO Lloyd Blankfein were among those asserting that defense.
“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the report said. “If we accept this notion, it will happen again.”
The report detailed numerous warning signs that were ignored, among them: an explosion in risky subprime mortgage lending, an unsustainable rise in housing prices, widespread reports of unscrupulous lending practices, steep increases in homeowners’ mortgage debt and a spike in Wall Street firms’ trading activities, especially in high-risk financial products.
“A combination of excessive borrowing, risky investments and lack of transparency put the financial system on a collision course with crisis,” the report said.
”
Since we are dependent on external economies when are we going to have the local expertise to analyse and predict properly? But will the powers that be listen to local advice or are we still believing that advice has to always come from overseas?
Let us not forget that Caymanians have always held their own abroad and competed against the best, and proved themselves.
"There will be precious few properties that actually sell for market value in 2011".
Kim Lund has to say this obvious falsehood because he needs desperately to hold on to the fables he’s been telling his clients: that the properties he is selling are worth the asking prices he posts, and that the years of news in the Kim Lund Market Reports were accurate when they said "The market is strong and getting stronger, and now is the time to buy".
As a seasoned real estate investor I never believed the "Reports" (or 99.999% of what realtors say worldwide about the real estate market given that their OBVIOUSconflict of interest and the typical complete absence of any actual business training – I mean how many realtors have an MBA for example?), but Kim’s Reports always have made interesting reading from an ADVERTISING perspective, since that is what they are.
Prior posters have well-covered the fact that market price is what the property would sell at today between a willing buyer and seller, not what the vendor wished he could sell it for based on the realtor’s outdated and unrealistic views of the market. The fact that sellers are not selling at those prices does not mean that the prices are still high, it just means that the sellers won’t crystalize the loss now by selling unless circumstances force the to (bank calling the loan, etc.).
Finally, I have to offer a plug for Mike Joseph. He has always struck me as an honest realtor, whose opinions have been driven more by reality than by pie-in-the-sky hopes and dreams. His comments here support that yet again. It’s nice to see integrity at play.
Thanks all. I’ll be riding it out with the rest of you.
OWNER FINANCING IS THE WAY TO GO.
Get things going Kim and co.
RENT TO OWN HOMES
OWNER FINANCING FOR HOUSE LOTS!
CREATE OWNER FINANCED SUBDIVISIONS IN EACH AND EVERY DISTRICT – I CALL THIS REAL DEVELOPMENT!
WAY TO GO!!
Thank you, to the person who suggested this. Deep thinking, innovative and creative.
Government lifting up the economy?
Is that some kind of a sick joke?
The truth is that the economy is dying trying to lhold up the government.
Government is the problem, not the solution
If you have any old editions of the Lund Report from the last 4 years read them. They are comedy classics. Apparently there is always great value out there.
The Cayman Islands have to sober up now…the hangover will be verypainful!
no worries! everything will be sold.
market and economy will be so low that we will remain with no options but sell our properties like a pea nuts soon.
hope we could transform our economy and policies as it was in early 2003.
this will be definately a DARTMAN ISLANDS
“Sales should start picking up this year but it will only be the very best properties with the most beaten down prices that sell. There will be precious few properties that actually sell for market value in 2011,” he confirmed.
It’s obvious to anyone who is willing to accept the truth. The inflated "market value" is the main reason that nothing is selling. Guess what? If you are truly motivated to sell, then you need to accept the fact that your price must drop considerably. Anything will sell for the right price. It’s a simple concept and it works every time. Hello????? Real estate experts, investors, property sellers – your current asking prices are highly inflated and completely outrageous!
I agree. As a potential buyer, I have held off because for the most part, the houses I am viewing are simply not worth the asking prices. I have a home in Cayman already, and would like tomove as my family is growing, but really seems that the asking prices are plucked from the sky, for the most part. Recently, I heard of a house on SMB, originally priced at under 2M CI, selling for just over 1M. Were the owners simply desperate enough to take a loss, or was the original price just inflated in the hopes of securing a massive (and unfair) profit? I can’t tell for sure, but in viewing that home, I certainly didn’t feel that the site, finishes and construction quality merited the original price tag. I am glad that the owner finally sold, but do wonder why he or she didn’t simply price the house more reasonably to begin with. Is it the realtors setting prices too high? The valuators? The owners? A combination of all three?confident I’ve found a home whose value is appropriately and fairly represented in its asking price. If I can’t find such a house here, I’ll invest elsewhere.
Sorry…looks as though part of my message was cut off.
That should read, "A combination of all three? Whichever it is, I will be keeping my money in the bank until I am confident I’ve found a house whose value is appropriately and fairly represented in its asking price."
I do agree with Kim Lund that the economy needs a positive jump start yet not an eager push for over development. The environment and what benefits will there be for Caymanians must always be the most important factors. Kim Lund has done well for himself yet I really don’t know how many native born Caymanians he’s hired to become Brokers and I also take his reports with a grain of salt. Micheal Joseph is correct that the rental market is suffering because of a decline in population and also because of over building yet crime and the rollover can’t be ignored as being the major contributors o this.
There’s no denying that Cayman needs extensive improvments to the airport, new major projects and WB Rd should be shift by the Marriott Courtyard yet let’s be cautious about who we get as investors. I feel that 2 championship golf courses would be ideal projects to create new jobs and also bring in golf tourism. Let’s all hope that 2011 is the year that Cayman makes a rebound
Blessings to all
Prior to Hurricane Ivan development just about kept pace with demand. The hurricane created a housing shortage which was compounded by a massive influx of workers to rebuild and clean up. This caused rental prices to go up.
Increased rental income and a massive influx of insurance money encouraged new development, meanwhile the damaged property stock was being repaired.
Once the stock of hurricane damaged properties was fixed, many workers went home and the Island was left with a glut of properties (repaired and new). This caused prices to go down and was futhered compounded by the global economic recession which depressed prices and encouraged further labour contraction (the downsizing and outsourcing of the workforce).
The situation is slowly stabilizing.
The Cayman Islands is poised to enter a new period of economic growth and believe me there are many reasons to be optimistic. Cayman is a still a fairly small place, 50K people and it does not take that much to ignite the economic engine. There are several very significant opportunitities for sustainable long term growth just around the corner.
Low rents can be beneficial to business. It creates opportunity. Affordability also allows people to own who might otherwise have been excluded from the market. To a certain extent a contraction was needed.
Now we need to think carefully about developing the economy in a well thought out and orderly manner. We do not want opportunities that overheat the economy again, or make us more vulnerable to systemic shocks or which place too much pressure on our current infrastructure and environment.
The glass may look half empty but it actually half full and more. Cayman is moving forward and will continue to thrive. A period of fear, uncertainty and discouragment is passing. A new era of hope and opportunity is here.
Re: Calls for extended SMB Development
For a minute there I thought I was in the twilight zone.
However, I then took note of the contributors to this article and it all made sense.
Most if not all are non-native Caymanian. (The significance of that comment will be lost on other non-native Caymanians as well.)
It is clear that many of our newcomers have only known and been exposed to the "bourgeois" aspect of this tiny island nation – and this article is dripping with the essence of this category of individual.
Interestingly, I have been involved in discussions amongst born and bred Caymanians and we queried why more locals are not active in the (luxury) real estate market. The conclusion normally isas follows;
Putting all issues of the ever present "expat mob mentality" within the industry to one side; the greatest detractor is said to be that such a profession simply feels alien or unnatural to the average born Caymanian.
Our fondest and first impressions of Cayman are not of beachfront development along our "prestigious" SMB. Instead they are of plucking the sea grapes and sea plums as you ran down the semi-grassy path toward the sea, placing them under the shade of the tall "pine trees" as you went splashing freely about all up and down SMB.
*To turn around today and form a (commission driven) profession out of such fond memories is next to sacrilegious for most of us.*
We couldn’t care less about how much the sparsely scattered condos and hotels may have cost and there was not a boundary rope or beach chair-protecting security guard in sight.
I understand how an adult newly arrived outsider can look at SMB and be blinded by $ signs – however, for a true, born, and self-respecting Caymanian … he / she has a connection to that part of our island that trumps any projected profits. In reality, most of us never even consider such a career.
Although, it may be beneficial if more of us did as the industry does yield some degree of power in the overall domestic economy and planning. Capitalism is really doing a number on our collective mindset and society!
Articles like the one above pains me to the bones. In this regard I am very pessimistic about the future of Cayman.
Such is life I guess.
(By the way, I am not some old fuddie duddie – this Caymanian grew up in the 80’s and 90’s.)
Lastly, this was not a swipe at expats or immigrants. This was simply a forwarding of a local perspective on the issue.
Thank you for your perspective. and particularly, for the last line of your posting. I was notlucky enough to have been here in the 80s, 90s or in the years before that, but even 15 years ago when I arrived, life was quieter and much less "bourgeois", as you put it. Then, it was sandy feet and the Barefoot Man on the beach; now it is a cocktail at the Ritz. Different. Some will prefer it now, but lots of expatriates, including myself, would prefer things to be the way they used to be — just as you do yourself. Please don’t count all expatriates among "the mob". Many, many of us are moved and wistful for the images you paint of sea grapes and sea plums and tall, shady pines.
I’m all for the way it was, minus the Barefoot bit.
Your comment really lifted my spirits today.
It is nice to hear from individuals such as yourself – and yes, you are correct – I do need to take care to not group everyone into a ‘bad’ bunch.
We really need to hear and see from more people like yourself.
Take care, and thanks for the feedback.
Your comments are heartfelt and honest Beloved Memories and a pleasure to read.
My motives to move to the island were for a simpler life, to escape the rat race and experience a pace of life I had come to admire during my visits to the Caribbean. The kind gentle people of the Caribbean with warm smiles. I rode a bicycle, avoided the curse of a cell phone, and basked in the simplicity of my life often dozing in the hammock with book while listening to Radio Cayman. I met many great people, Caymanians and expats, and a few less desirable of both groups. I appreciated the opportunity to live and work there, and though materially I left with little more than I arrived with, I cherish the memories of time well spent, and my life is enriched by it.
Beloved Memories, you are a fine ambassador for your people and your islands.
A heartfelt thank you for the opportunity.
I applaud you, very well said and that is also my view and the way I feel about our precious Seven Mile Beach that has been concrete-in by over devil-up-ment. I wish I knew you so we could further compound your views on ourParadise gone wrong, if you care to you can email me @ jahlebb@yahoo.com
I have saved the email address and may get in touch.
I loved the "devil-up-ment" wordplay by the way!
Until then.
This expat understands your point perfectly well. Lots of people don’t want to be real estate agents for a lot of different reasons. Unfortunately the mindset you describe will result in stagnation and poverty for most.
Honestly, I do not know what to make of your comment.
However, I will say this much – it has left a bad taste in my mouth.
In essence you are suggesting that every aspect of one’s childhood / environment / beloved pastime etc. comes with a price tag.
Obviously I have no idea from whence you come but I wonder if you would apply the same logic to the destructive "development" of your favorite childhood creek, lake, fishing hole, playground, campsite, picnic area and such?
As I ponder your words a bit longer I am now convinced that your post is rather cynical in nature.
I will say this much – if presented with a guarantee of becoming a billionaire in a year’s time provided I was the decisive hand behind a complete and total "development" of Seven Mile Beach – I would pass without a moment’s hesitation.
For I would not be able to face my family members, friends, fellow Caymanians and children – much less myself in the mirror.
If that means I am doomed to a life of "poverty" – then so be it.
It is that serious my friend.
Amen and amen. I have often said (and my friends will know who is posting) that if I had a massive amount of money, I’d buy the old Pageant Beach site and take down the fence so that people could once again pull in there to eat their lunch, go swimming and snorkeling and just enjoy being in the Cayman Islands.
No condos. No massive buildings. Just trees and water and sky.
🙂
i would suggest you would move to cayman brac…you would love it there!
i just wonder why there aren’t more people in cayman brac?????….zzzzzzzz
nice… why don’t you leave out everything but the zzzzzzzzzzzzzs
Beloved Memories,
I see with you. I feel you, and I understand where you are coming from. However I have a somewhat different view and it is in favor of suggesting a new commitment from these Cayman realtors in helping locals become homeowners and property owners.
Now that real estate sales are down Sales can be boosted with creative financing. This is an excellent opportunity for Kim Lund and associates to begin to give something back to our society. Yes Kim, offering some owner financing to those individuals who may not qualify for a bank loan but could still make a down payment and make the monthly payments as long as they are not outrageous and an impossible amount to pay monthly.
How about a George Town Subdivision (centrally located) where Caymanians can secure a piece of land for their children or to build a private dwellinng on. As long as the downpayment is not too much and the payments are reasonable, why not go ahead and help our community? Everybody seems to be looking to government to solve all our problems. There are some developers and realtors among us that can jumpstart the development of houses for our local people making them feel responsible as a home owner and giving them meaning in life something to live for.
I see no reason why someone aspiring to own a home should not be given the opportunity to pay down as little as$4,000 or 5,000 and begin to make monthy payments on the basis of the owner offering the buyer Owner financing.
RENT TO OWN
I see no reason why Kim Lund and the other Realtors nationwide cannot spearhead projects to help our people. What are you waiting for?There are people desiring to own a home. They can afford to pay rent but can not handle a high mortgage monthly payment. $500 to $700 per month is not only reasonable but reachable!. The modern day ripoff mortgage rates set by the banks are not only impossible but should be outlawed. People should be given the opportunity to Rent To Own property. The Rental monthly payments is put towards the principal and it is reduced over 15 years or 20 years including interest. Balloon Payments are a disappointment and a shark arrangements that no one should have to deal with. They do not work and comes back to haunt the buyer who loses his entire investment.
Its high time and past due time for Cayman Islands property owners and Cayman Realtors to give people a chance at life and at the end of the day you can say you have given something back to our society the one you live in as well. You’ve all made your millions, its time to give something back.
Bravo 15:41
You hit the nail on the head. Its time people like Kim Lund give somethig back to our society after enriching himself so greatly. If he wants to help he can. Implement and introduce owner financing programs with creative financing to make purchasing a home or raw land much easier for the local person.
come on KIM LUND, SHOW US WHAT IS REALLY IN YOUR HEART.
Excellent post!
Hopefully we will see some changes in the near future.
Appreciate the feedback.
Out of interest who sold all that land for the condo’s to be built in and received lots of $$ for it?
Did those money hungry expats sell those lovely Sea Grape trees to be pulled down?
Are the “expat mob mentality” really all to blame?
Or did Caymanians own the land and they saw $$$ hovering and sold to the developers knowing what was to happen?
I always find it is best to look at the source of the greed and frankly many locals only have to look at their parents or in the mirror for that
I will answer your question by asking you another question.
"Out of interest, what formerly powerful supernations shipped away their manufacturing and outsourced their jobs in order to make big $$$ but are now crying because of the ongoing economic recession and mass unemployment?"
Historical context is everything my friend – perspective.
However, the key in this life is to learn from past hiccups – not repeat the process to get them yet again.
Interestingly, this is appears to be what many are calling for Caymanians to do.
EXCELLENT!!!… SUPERB!!!… It should stay like this for a much longer time to come.
It is the Real Estate Brokers and the Developers who are making a KILLING in profits from our country/soil. This doesnt do the rest of us much good.
In my opinion, it is the primarily the Real Estate industry that is DRIVING UP the cost of Real Estate exponentially every week/month. Logic – When a seller has a RE Broker to sell his/her property, the RE Broker will try to push the envelope by adding on a couple thousand dollars to the original price just so their commission is greater.
*** Also as a theory, RE Brokers probably have ‘Special Arrangements’ with Property Surveyors/Valuators to produce INFLATED valuations for the Broker so that the ‘Selling Price’ of the propoerty is much higher just so they can make a BIGGER KILLING in commission. Hence, as this trend continues, so does the continuous INFLATION/rapid increase in the market value on Real Estate into the future… UP, UP and Away… from the grasp of the average Caymanian.
I sincerely HOPE the RE Market gets worse for that matter. That way the average person might be able to afford a Lot of Land or Home yet again.
Sincerely, IRON CLAD
Brokers with sense just want to close the deal quickly and collect the commission. It is not in their interest to try to jack up the price if it slows or stops the deal.
Were it not for 3 things I would have bought property here:
1. the rollover policy
2. Rampant crime threatening to turn this place into a backwater and destroy the vacation rental market
3. the fact that, at any one time, half of the island seems to be for sale creating an oversupply.
Instead I’m sending the money I earn here back to my homeland so I can buy property there when they kick me out of Cayman.
Oh no, the poor real estate agents. We will need to do whatever we can to get properties moving again so that they can get back to taking their ridiculous commissions. I mean someone has to pay for their lavish lifestyles.
In proper countries their cut is on a sliding scale, here it’s just gouge, gouge, gouge. Sure, they provide a useful service, I am not doubting that, but surely it’s not worth such a large chunk of my investment. I’ve bought and sold in Cayman and although I was one the lucky ones to have made a couple of dollars but it was certainly no help to the real estate agent commission. I my case I actually found the buyer myself by chance so double whammy.
The Seven Mile Beach real estate market is driven by US/World economy. However, the vast majority of the remaining ‘local’ market is driven by local demand and supply.
Unfortunately there is too much supply which is still increasing- ie new condo developments, people leaving the island etc
and low demand which is still falling…10,000 (or whatever the number) less people on the islands – they all lived somewhere.
The oversupply is further reducing demand as it leads to rental price reductions. With rental prices coming down it makes less economic sense to purchase – especially with forseeable change in the demand/supply outlook.
How to resolve.
1. Reduce supply -Stop all planning approvals for residential dwellings.
and or
2. Increase the demand by relaxing rollover/immigration policies which will lead to an increase in population and also a larger base of prospective purchasers. Completion of the Shetty hospital would be another positive from the demand side.
Continuing down the current path will only lead to reduced real estate values, with the probable exception of Seven Mile beach, where demand is driven by the US/Global economy rather than local factors.
The commerical real estate, well office space, rental and sales business will also be hit shortly with the increase in vacant office space created by the relocation of CIG staff to the new Govt building. In addition to that at some point soon the Walkers building will be occupied, and their current office space will come on to the market, further depressing values.
Interested to hear your thoughts…
It is because of the mindset of individuals such as yourself why Cayman has to be extra careful in regards to immigration.
Did you read what you wrote?
Do you realize that the welfare of Caymanians is completely disregarded by your words?
For the better good of my people I sincerely hope that YOU are rolled over in the near future.
" … How to resolve.
1. Reduce supply -Stop all planning approvals for residential dwellings.
and or
2. Increase the demand by relaxing rollover/immigration policies which will lead to an increase in population and also a larger base of prospective purchasers. …"
Absolutely disgusting.
Yes, I read and understood what I had written. Please read it again and maybe you will understand – the welfare of Caymanians is not disregarded by my words.
If you have an interest in the value of your real estate increasing then there is a choice to be made.
Either you can address the supply by reducing the amount of new housing stock .
or, alternatively
You need to increase the population to fill the ever increasing number of properties.
The third option is a combination of the above.
Caymanian welfare is not disregared at all – surely a decision needs to be made?
Incidently this choice is yours to make and not mine – I don’t have the privilege of suffrage.
XXXX
Economics centres around supply and demand, but you fail to see that.
Which Caymanians are disadvantaged by reducing planning approvals? Landowner’s are the only ones I can think you might mean and they actually gain, because tougher planning controls means that the value of land zoned for development will increase (of course land that is not zoned for development will reduce in value, or at least stay at the same value).
On the supply side, increasing population is the only tool you’ve got. If population declines, so do values, the number of jobs, incomes, profits, welfare and everything else that relies on government spending.
Think please. And read an economics book.
Caymanians will need space for their children, grand children and so on. We don’t need to be overpopulated and poverty stricken so a few Caymanians and alot of expats can get rich/richer.
that sounds similar to Lebensraum, birds of a feather stick together my friend
Look it up
You must have omitted; 3. With Government aid develop land for production of thatch palm to revive rope making industry as new primary export.
Rental prices were much too high and vacancies were very low. Frankly a lot of landlords got what they deserve and market forces have now corrected and humbled them. The people who can least afford to be financially abused are now afforded some respect and better housing.
That’s a win in my book.
Residential, you should never buy a house as an investment.
I’ve never understood why people constantly check the value of their home, the price only counts on two days.
If the markets are down and you’re selling for 25% below what you paid, I assume you’re moving someplace new and hopefully bought at a 25% savings thereby… transferring any future potential upside to your new property and in the process… passing your old home along to somebody at a more affordable price.
I get so tired of all these real estate ‘experts’ moaning because of the market. Kim Lund has done very well out of it, but the motive always seems to be greed. I have never used a realtor and owned and sold several properties. For the most part they charge WAY too much for their services. Perhaps if they looked at that it might help
Never listen to Real Estate Brokers!
Do we not remember what was said when a local real estate broker talked about launching his Cayman Real Estate Mutual Fund?
Everthing that was stated here is pure conjecture!
Even what was said about the increase in vacant rental accommodation do not take into consideration new owner occupied premises. In the last two years almost 2000 new homes and apartments have been built for ownere occupancy. These new owners previously rented some of these now vacant apartments.
To each reader be careful what advise you get!
“Confidence is everything, and once Cayman starts to get active with some new projects like Dr Shetty’s hospital, the George Town cruise terminal and others, there could quickly be an upsurge of positive activity – and on these small islands, the trickle down effect can flow quickly.”
Or there could be a complete market collapse when they fall through or are delayed.
The only properties selling are the big international beach front properties. The two bed condos and family homes are practically unsellable. No one know how much their prices have really crashed already. But we are some tough regulation from the EU and the US from seeing a $450,000 home in 2007 being worth less than $200,000.
If you are not in this market don’t go near it!
The Real Estate Agents are part of the problem as well as they are not willing to lower their commission and do what needs to be done to close the deal. I know that in several cases the Real Estate Agents refused to take certain offers to the sellers, playing seller and potential purchaser against each other. Eventually, after the contract with the Real Estate Agents expired, the parties settled directly.
The two major problem unique to Cayman Real Estate is unrealistic asking price encouraged by Agents (who want to get the listing at any cost) and conflict of interest among Quantity Surveyor and their clients.
Solution is simple some one needs to regulate the agents who are listing properties above market price and banks should do their valuation and get it reimbursed by the purchaser.
As long as the price is reasonable and shows good ROI there is enough demand locally to absorb the properties. This goes even for businesses that are trying to sell.
Finally CIREBA rates have to come down. It is unrealistic compared to rest of the world.
Two real problems with Cayman Real Estate market is that CIREBA agents are greedy where they would sign up properties at unrealistic values, just to get a listing. They need to wake up and follow the code of ethics. Dont sign up properties if the asking price is too high. (The argument here is that if I dont sign up another agent is going to get it – thanks to the free market thoughts). Who is regulating the agents.Some one is not performing their job. On the other side, so called professional quantity surveyors needs to work at arms length and maintain independence(currently there is conflict of interest). Both of the above factors put together making the market unrealistic and not helping to build liquidity.
Like any matured market return on investment should determine the market price along with supply and demand. So if the price is right and shows a positive return people are going to fly in to buy properties. only properties that are moving is either distress sale or shows a realistic ROI.
So if CERIBA agents and Quantity surveyors start follow the best practice and stick to their standards we could build liquidity into our market. Also banks should appoint their own valuators and pass the cost to the buyers rather than asking them to get an independent valuation, which is very much subject to manupulation and not helping the current crisis.
Last but not least CIREBA should reduce their rates so that sellers could work with realtors and listened to their professional opinion and list their properties at realistic prices. So at the end it wont look as if the prices have dropped 20 – 30%.
Kim Lund says….not many properties will sell for market value in 2011. This statement demonstrates his complete lack of understanding of value and the market. If a property sells between a willing seller and a willing byer in the open market then that is the market value! Houses are only worth what people are prepared to sell them for. It is inbrokers interests to promote high artificial prices. The higher the price the higher the commission.
Yes, I’ve always thought there was a difference between "asking price" and "market value". Apparently Mr. Lund has confused the two?
Move Seven Mile Beach road north of the public beach back?
The only remaining segment of Seven mile Beach that is still visible to the public? The only remaining scenic vistas of our seven mile beach?
To build more hotels that will be 85% empty most of the year? A mega resort? When in the best of years we can’t fill our current hotels.
What we need to do is fix our tourism project not simply build more. Fixing the tourism product involves ensuring a pristine and not over developed island environment. Maintaining scenic vistas, encouraging local handicrafts and arts, developing small world class boutique hotels (restaurants, cafes, bars) that capture the special character of (old) Cayman.
Having mega-resorts are only going to further discourage the tourists who will most contribute to the island from coming. Mega resorts = package deal all inclusive tourists who do not spend much outside of the walls of the resort compound.
Get your facts straight – Caymans occupancy year round is above 60% – so that means it is impossible to have resorts sitting 85 % empty for most of the year….Cayman has about 2200 hotel rooms and only around 750 under a flag…Pitiful in terms of Tourism Product…As for out Tourism product – it is literally 15 years behind the rest of the Caribbean…Our newest tourism product is the Ritz ( Already old in development terms) Most of our Tourism product is stuck in the 1980’s and cannot compete with new projects in Turks and Caicos, Bahamas, Belize, St Lucia, Jamaica etc…We cannot compete on price and certainly not on quality pf product…
7-8 months of the year it is difficult to get a room in Cayman ( in a hotel) Hurricane season is a given low occupancy…Mega resorts are not all inclusive – do your research 4 star mass tourism products are aimed at the all inclusive crowd (Sandals, Beaches etc…)
New product is imperative to be able to compete on a global marketplace where there are hundreds of destinations selling sunshine, coconuts and palm trees…
Well said.
What utter rubbish? Mr Lund is quoted as saying "There will be precious few properties that actually sell for market value in 2011”. Hello the selling price is the market price.
‘Theres never been a better time to buy’ I think someone said a couple of years ago when the market peaked
Let’s see now……no one here who wants to invest? No one to buy homes or condos? I wonder if it might have something to do with the fact that potential buyers and real estate investors don’t see a value with Cayman if they have no hope of staying longer than 7 years. I guess that means come here for the work and send your money back home so you can have it later. Makes sense to me. Seems like we have shot ourselves in the foot again.
Aren’t you tired of this same line?
The only people saying there will be any positive upturn in sales are the brokers. Their views are not exactly objective – "There has never been a better time to buy" and all the other mindless cliches come to mind.
"There will be precious few properties that actually sell for market value in 2011" Sorry, isn’t market value what an arm’s length buyer would pay to an arm’s length seller? If that is true then won’t properties be selling at market value and that value is considerably lower than most seller’s expectations?
Cayman prices are down at least 25% and probably heading further south. Why would anyone won’t get on board this market when you have to factor in massive 15%+ transaction costs to enter and exit?
stamp duty can be as low as 6% as I’d rather have this than annual property taxes that fluctuate overseas and $40K a year going to a landlord. I’ll take my chances that I bought a sound home that will keep a steady value when I sell it or rent it our in five years when I get rolled over. (?)
Where do you get 15%? and the BIG question is….do you own a home here or are you just passing by and complaining?
I’m an expat and always keen to listen to reason, but have no time for opportunist visitors who rent and whine.
Stamp duty and legal fees when you buy. Broker commission when you sell. Pay to enter and pay to exit. You can try to sell yourself but it’s harder than you might think at the mid to high-end
15% is the approximate cost of buying a property and then selling it (even the very next day)
No property tax is good if you plan on keeping the property for 5+ years, if not it is way better than a high transfer tax.
So 7% transfer tax… + legal fees…. + real estate agent commissions when selling… that’s approximately 15%.
If you add up the cost of furniture, hurricane shutters… etc it can be more than 15%.
The other cost in Cayman that is ridiculous is the high insurance cost, which greatly reduces the ROI of trying to rent it out.
For the first 5-7 years of a mortgage over 95% of payments are interest repayment so you are no better off than renting in that timescale.
It’s called supply and demand. Quit building new condos when half of the existing ones are vacant. Only then can existing real estate have a chance to increase in value.
With all the new developments the prices can only go down.
Doh ! And there was me thinking that “market value” is/was what the property commands in teh market at any point having regard to what a willing seller will pay with the property having been marketed correctly !!! These real estate people do talk rubbish.
And they dont care if they lie empty – as long as they get their comission…. they are like vultures..!!
Don’t insult vultures.