Q3 2023 Market Report

Q3 2023 Market Report

06 Oct 2023

The Provenance Properties Cayman Islands (PPCI) residential sales team is committed to providing our clients with all the crucial details necessary to make an informed choice when approaching real estate transactions. When you become a client, you gain the advantage of access to Dart’s own in-house data analysts, providing up-to-date, accurate and relevant information regarding the current sales index. Having this market analysis easily to hand enables our team to stay on top of industry trends and provide you with the knowledge to buy or sell with confidence.  

The patterns established in the first six months of 2023 persisted into the third quarter. Specifically, the volume of condo sales continued its downward trajectory, while both sale prices and rental yields experienced additional growth. 

Q3 Condo sales activity

As indicated by the chart above, the condo market experienced a rise in listings during Q3 2023, with 187 newly available units compared to 172 in the corresponding quarter of 2022. The number of listings sold decreased from 118 in Q3 2022 to 73 in the last quarter. The combined effect was a continued reduction of the ratio of the number of units sold to the number of new units listed, which followed the trend from the previous quarter. The relative slowdown in sales activity could be a result of the large increase in interest rates since last year. 

“Despite the decrease in sales activity, the Cayman Islands remains a jurisdiction of choice for many families and an increasing number of global entities,” says Provenance Properties Sales Specialist Antonette Baptist.  “We continue to see increased demand for single-family homes despite record high prices in highly desirable neighbourhoods.” 

Provenance Properties Real Estate Agent Ewelina Cimring shares this optimism. “This quarter we saw the highest single condo sale in CIREBA’s history,”says Cimring. “And the buyer was represented by Provenance Properties.” 

Q3 DOKHPI condo price index

The DOKHPI condo price index estimates an 8% increase in condo prices in 2023. Although noteworthy, this growth rate is lower than what was recorded in the previous year. It's important to note that these index values are subject to adjustments as more transactions are recorded over the course of the year. 

“The fact that prices are still growing, despite the increase in mortgage rates, could be evidence that demand still exceeds supply in the Cayman Islands,” says Cimring. “It is also worth noting that while condo prices are lagging indicators, sales activity is a leading indicator. 

Q3 Median condo income yield

The median condo income yield continued to increase, reaching 5.7%. The yield is a function of condo prices and rents minus strata/insurance costs.  

“With prices up, the most logical explanation for the increase is an increase in rents,” says Baptist . “Since rents tend to follow supply and demand fundamentals, this is another indication for demand outstripping supply.”  

As the year continues to unfold, these projections are subject to adjustments. However, the sales team continues to be optimistic, particularly following the proposal from the Cayman Islands Government to increase exemptions on stamp duty for prospective Caymanian homeowners.  

“Raising the stamp duty allowance for first-time Caymanian buyers will make home ownership more accessible,” says Provenance Properties Sales Specialist Shanice Ebanks. Such changes reflect the dynamic nature of the real estate market, offering fresh opportunities for both aspiring homeowners and seasoned investors and I look forward to working with more first- and second-time Caymanian buyers and to helping them on to the property ladder.” 

"The Cayman Islands Government (CIG) is poised to bolster the local real estate scene by revising stamp duty policies. Plans include raising the stamp duty allowance threshold for first-time Caymanian buyers, making homeownership more accessible, while also introducing a reduced stamp duty rate for those considering a second property purchase. For more information on Q3’s data and the latest estimates in price changes please contact our team today.  

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