How is the real estate market NOW compared to Q1 of 2022?

If you remember, real estate in Cayman was on fire in 2022. Developers completed their projects, and interest rates were 5 -6%. The preconstruction buyers bought low and already had equity in the property when they applied for a mortgage. They either moved in themselves. Or they furnished and rented the property at record-high rents to cover their mortgage. Then, in 2023, the interest rates started climbing quickly, pushing many buyers out of the market; they could not afford to buy, which carried into this year. The local Cayman banks are offering mortgages at 8%. In Canada, you can get a mortgage for 5%. (https://www.forbes.com/advisor/investing/fed-funds-rate-history/)

There is always real estate to be bought and sold; people downsize, divorce, relocate off the island, grow their families, sadly die, or people on work permits get "rolled over," so they need to sell. Savvy investors who have cash or can afford mortgages are buying now; they offer a decent price, and if a seller must sell, the sellers will concede. Like every real estate cycle, we know this lull will end. Most real estate agents in Cayman do not remember 15 years ago when our late 2008/09 real estate market went sideways.

Q1 of 2022: 230 properties sold and Q1 of 2023: 168 properties sold.

Q1 of 2024: 182 properties sold (25% were a block of 43 condos sold at Lakeside).

Interestingly, the lower end, under US$1.2 million, is selling the most but was reduced this year from the last 2 years: Q1 2023 182; 2023 131 and 2024 166 (119 w/o Lakeside).

The US$2 to 4 million properties are much slower: Q1 2022 51; 2023, 30 and 2024 30 properties.

The US$4 to 6 million properties in Q1 2022 7; 2023 only 3 and in 2024 12.

Over US$6 million in Q1 2022, 6, 2023, 4 and 2024 6 properties.

First-time Caymanian Buyer stamp duty has been raised to CI$550,000.

So, let's look at that. There are only four homes to buy for that price in Cayman on CIREBA MLS. There are two homes in Breakers and one in East End. One is in Savannah, but it's a frame, and the local banks and insurance companies do not like lending on the frame, so a buyer needs a lot more than a 10% down payment. If you are okay with a condo, Engel & Volkers can help you out.

West Bay has 13 existing properties for sale, and another 63 are proposed to be built if they can get planning approval. George Town, you can buy 14 properties. Prospect/Savannah has 36 properties. Breakers/East End has 29 proposed to be built. If you must work in George Town or have children who have to drive to school at 8 a.m., count on living in your car for 2-3 hours a day in traffic.

The Key Highlights of the Stamp Duty Plan

In November 2023, Premier Wayne Panton introduced a plan to increase property value limits for stamp duty exemptions for first-time Caymanian homebuyers. Under this initiative, significant adjustments have been made to the stamp duty thresholds, making property ownership more accessible and affordable for Caymanians.

Increased Thresholds: For single first-time Caymanian buyers, stamp duty exemptions now apply to properties valued at up to $550,000 and raw land valued at up to $250,000. Previously, exemptions were limited to properties valued at $400,000 and land valued at $150,000 or less.

Tiered Assessments: Properties valued above $550,000 but less than $650,000 will incur stamp duty at 3.75% on the difference above $550,000For land valued above $250,000 but less than $350,000, stamp duty will be assessed at 3.75% on the difference above $250,000.

Expanded Benefits: Concessions now extend to Caymanians purchasing their second property, introducing a new tier of stamp duty relief.

Group Purchases: Groups of 2 to 10 Caymanians purchasing their first parcel of land together will enjoy no stamp duty on values up to $450,000, increased from $300,000 before. Similar benefits apply to group purchases of developed residential property, with thresholds raised to $600,000.

Second Property Purchases: Caymanians purchasing a second parcel of land or a second home will qualify for discounted stamp duty rates. These stamp duty developments are available as of November 2023, marking a step towards realizing homeownership aspirations for many Caymanians. As Minister of Finance and Commissioner of Stamp Duty, The Premier has expedited the implementation process to ensure swift access to these benefits.

Empowering Caymanian Homebuyers: The Cayman Islands government emphasized that these concessions aim to alleviate the financial burden on Caymanian citizens and families, making homeownership more achievable and sustainable. The government assures that these measures will not compromise its financial position and is committed to facilitating a smoother path to property ownership for all Caymanians. This initiative reflects the government's dedication to fostering a thriving community and empowering its citizens to build a brighter future on the beautiful shores of the Cayman Islands.

In review, there is still real estate being listed and buyers looking, so reach out to a CIREBA agent at Engel & Volkers Cayman and ask them for the best real deal on the islands.