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Last Updated: Oct 14, 2016




After several challenging years, Cayman Islands’ property market is now growing rapid again, amidst increased consumer and investor confidence. House prices are rising strongly. Property transactions are picking up. Residential property construction is also rising, though more slowly.

During the first seven months of 2016, the average value of freehold property transfers rose by 23.8% to KYD389,602(US$475,124) over the same period last year, based on figures from the Lands & Survey Department. The average value of freehold property transfers rose by 6.7% y-o-y last year, after a 9.5% decline in 2014.

Growth is centered along Seven Mile Beach for condominiums, and Cayman Kai, on the island’s north, for single-family homes. The most expensive housing are along Seven Mile Beach, a coral-sand beach located on the western end of Grand Cayman island, where property prices can reach as high as KYD1,066 (US$1,300) per square foot (sq. ft.).
  • At ThePinnacle, a luxury beachfront development on Grand Cayman's Seven Mile Beach, the average sales price of condominium units was KDY1.68 million (US$2 million) in 2015, up by 11% from a year earlier, according to Charterland, Ltd.
  • At The Meridian, a collection of 32 super luxurious oceanfront villas located on the Seven Mile Beach, the average sales price of villas was KDY1.41 million (US$1.68 million) in 2015, up by 12% from the previous year.
  • At the Regal Beach Club, a beachfront condominium development of 57 units in six, 3-storey blocks located on the Seven Mile Beach, the average sales price rose by around 10% y-o-y to KYD522,694 (US$622,255).
  • At the George Town Villas, a 54-unit seafront condominium development in Grand Cayman, sales prices also increased 13% in 2015 from two years ago.
  • At The Grandview, a seafront development of 60 condo units in 12, three-storey blocks in Seven Mile Beach, the average sales price increased 8% y-o-y to KYD475,149 (US$565,654) in 2015.

Other areas are also experiencing robust growth. In George Town’s Garden, Coco, Mystic and Sunset Retreat, the average sales price of two-bedroom inland townhouses rose by 9% y-o-y to KYD193,591 (US$236,087) in 2015.

“We are seeing a definite uptick,” said MalinRatcliffe of West Indies Brokers Real Estate. In fact, with strong demand, coupled with limited supply, the housing market is now turning into a seller’s market.

Property demand is rising strongly. The total number of open market property transfers in the Cayman Islands rose by 14.5% to 1,559 units in 2015 from the previous year, based on a property review conducted by Charterland, Ltd. Likewise, the value of real estate transactions also rose by 6.5% y-o-y to more than KYD536 million (US$653.7 million).

Residential construction activity is slowly improving, with an increase in luxury condominium developments. The total value of residential building approvals in Cayman Islands increased 3.8% y-o-y in 2015 to KYD268.2 million (US$327.1 million), according to Cayman Islands Planning Department. A sports and real estate development is planned on a 600-acre of land in the eastern district of Grand Cayman. The development is expected to include a world-class golf course and to offer freehold apartments, villas, and land plots starting from KYD205,000 (US$250,000).

Cayman value property transferDuring the past decade, the movement of the average value of property transfers has been erratic. This can be attributed to large-scale acquisitions made by some property developers in a particular period, which distort the property market. For an instance in 2011, Dart Group made significant acquisitions, which represented about 28% of the total value of all the property transfers for that year.

Analysis of Cayman Is Residential Property Market »


RENTAL YIELDS
Last Updated: Dec 29, 2013



In Cayman Islands, rental returns can be surprisingly good. Condominium costs on 7 Mile Beach vary in a wide range, with prices from about US$4,000 to US$11,000 per square metre (sq. m.), and some super-luxury large condos hitting amazingly really high per sq. m. prices.

The expected rental income from the smaller properties (120 sq. m and 200 sq. m.) is now about US$3,000 to US$4,500 monthly. This means average rental yields of approximately 5% to 7%, which is not bad.

Our property sample for larger condos was too small to give an accurate picture of rental incomes for this property category.

In general, prices have been firm. The average price of condos in the Cayman Islands at the time of our 2012 survey was US$4,242 per sq. m. - just a bit higher than last year�s US$4,041 per sq. m..

Rental yields in the other beach communities in Grand Cayman were even better. Properties are less expensive, at about US$2,000 to US$3,000 per square metre, but the expected rental income from these properties is about US$1,000 to US$3,000, giving rental yields of from 7.48% to 8.17%.

In the Cayman Islands, really large properties are less attractive in income terms, with much lower rental yields.

We were surprised by the generous rental yields on smaller and medium-sized condos. But in recent years, high yields have been normal in the Cayman Islands.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Oct 04, 2013



cayman islands luxury vacation homesThe Cayman Islands is a no tax jurisdiction. There are no income taxes and capital gains taxes in the Cayman Islands.

Stamp duties are levied on lease contracts and transfers of properties.

Rental Income: Owners leasing properties to tourists are liable pay to tourist accommodation tax a levied at 10% on the gross rent without any deductions.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Oct 03, 2013



Roundtrip transaction costs are around 13.50% to 20.50% of the property's value. The buyer pays the 7.5% stamp duty. The real estate agent’s commission is around 5% to 10% of the property's value, and is usually paid by the seller.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: Aug 31, 2006



cayman islands luxury residential houses and propertiesRent: Rents and rent increases can be freely negotiated. Landlord power is strong. Landlords can (in practice rather than strict law) increase rents in mid-lease, and impose surcharges for late rents.

Tenant Eviction: There are no specific legal provisions regarding rental contract termination. Landlords often give tenants notice a few days before contract expiry. Using formal legal channels, it takes an average of 180 days to evict a tenant.

Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: Oct 14, 2016


Modest economic growth

Cayman Islands GDP and InflationThe Cayman Islands is one of the most affluent countries in the Caribbean. Thanks to its twin pillars of development, tourism and international finance, this British overseas territory enjoyed average real GDP growth of 3.1% annually from 1998 to 2007. The country is the world’s sixth largest banking center. “Cayman is a First World country in the Caribbean with a large international business community and well developed, diverse facilities including hospitals, schools, golf courses and hotels,” says Charles Weston-Baker of Savills.

From 2008 to 2010, the spillover effects of the global financial meltdown caused real GDP to fall by 7% in 2009 and another 2.7% in 2010. The economy finally recovered in 2011, with a real GDP growth rate of 1.2%. However, the economic growth has been modest since then. In 2015, the economy grew by 2%, after expanding by 2.4% in 2014, 1.5% in 2013, and 1.2% in 2012, according to the Economics and Statistics Office (ESO). The economy is expected to continue growing modestly this year.

In 2015, consumer prices fell by 2.3% from a year earlier, after inflation rates of 1.3% in 2014, 2.2% in 2013, and 1.2% in 2012, according to the ESO. Then in June 2016, consumer prices dropped 0.8% from the same period last year.

Unemployment is currently 3.9%, down from 4.2% in 2015, 4.6% in 2014, 6.3% in 2013, 6.2% in 2012, and 6.3% in 2011, according to the ESO.







  • Complete tax freedom
  • Pro-landlord rental market
  • Quite high transactions costs
RESIDENTIAL PROPERTY FACTS
Price (sq.m): $4,163 For a 120 sq. m. property, usually an apartment.
Rental Yield: 7.25% For a 120 sq. m. property, usually an apartment.
Rent/month: $3,018 For a 120 sq. m. property.
Income Tax: n.a. Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 17.00% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: n.a. Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Pro-Landlord Rating is based on a detailed study of each country’s law and practice.




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