By Sue Nickason
“Don’t wait to buy real estate. Buy real estate and wait.”
That is the decision many people are pondering during this dynamic period in the markets. One thing is certain – no one knows exactly where the real estate market is heading this year. Some industry representatives suggest a decline in prices and a slowing pace of sales. Others argue that market demand remains strong and in fact, in some sectors demand is increasing. These trends will vary by market area, including in the Caribbean.
In the Cayman Islands specifically, some island realtors report that demand remains brisk, including demand from offshore buyers seeking to acquire recreational properties in lower density areas and to establish permanent residency. Based on that market feedback, here are five reasons why buying real estate in the Cayman Islands right now could be a good thing:
- Low interest rates. Accessing debt right now is affordable. Lower debt costs provide opportunity for higher rates of return if the property is sold when market demand drives prices higher.
- Lower volatility. The stock market has typically had higher levels of volatility than the real estate market. For investment-motivated purchasers seeking to reduce risk in their overall financial portfolio, investing some funds in real estate in a stable, well-regulated and tax-neutral jurisdiction such as the Cayman Islands may provide the desired long-term solution.
- Liquidity. Many investors prepared for a 2020 recession (albeit not necessarily due to a pandemic.) and moved some investments from the markets to a cash position. For those individuals who have liquid assets available, the Cayman Islands may present a safe place in which to invest those funds in real estate whilst waiting for stock markets to stabilise.
- Residency. Preliminary indications suggest that globally mobile, affluent families are seeking “Plan B” locales such as the Cayman Islands to earn permanent residency through investment in real estate. Should this trend prevail, property purchases in the US$1.2 million+ range should command market interest.
- Confidence. “Unprecedented times” has become the prevailing adage during the pandemic. Economists have raced to model likely scenarios with regards to unemployment, GDP impact and eventual market recovery. Yet one thing is clear – the absence of a truly comparable historic model on which to base reliable forecasts makes that a challenging exercise for even the most learned. What is not difficult to forecast, however, is the confidence in the Cayman Islands by those who have already invested in and work and live here. The merits of sound government and regulatory environments, world-class infrastructure, personal safety, robust and world-class financial services industry, and the benefits of tax neutrality to individuals and corporations, are not lost, particularly in the long term.
Those with patient capital know this is a time to remain invested in the Cayman Islands and to seek opportunities now, before markets rebound and tourists and property investors return to continue the recent propulsion of property prices. if you want to discuss your options for property purchases in or relocation to the Cayman Islands.
About the author
Sue Nickason has been VP Marketing and Sales at Dart Real Estate since May 2017. Originally from Canada, Sue has worked in luxury residential-resort development in the Caribbean for over a decade. Sue and her team are committed to promoting the unique value proposition of the Cayman Islands to those seeking to establish a personal and/or corporate presence here. They serve as trusted advisors and offer exceptional service, timely market information and a warm “Caymankind” welcome. Sue earned a BA (Honours) from Mount Allison University, an MBA (Distinction) from University of Guelph and has completed studies/earned certificates in journalism, economic development, adult education, customer service, revenue management, and protocol. Sue is a member of the Christie’s International Real Estate Master’s Circle and an Angel in the 100 Women in Finance network.