Cayman Property Review 2011: An Independent Review by Charterland.

Reports by prominent realtors throughout 2011 suggested that the year would be the strongest in terms of real estate sales since 2006, with increases in sales of 200% on 2010 being reported by the Cayman Islands Real Estate Brokers Association (CIREBA).

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Against this positive background, and the prediction of a long awaited recovery of the local property market, Charterland have completed their fourth annual, independent review of the Cayman Islands property market.

The review, undertaken by qualified Chartered Valuation Surveyors with many years of professional experience in the Cayman Islands, is based upon a thorough examination of every individual property transfer and lease registered with the Cayman Islands Government’s Land Registry for the calendar year of 2011.

Based on this analysis of all open market sales, Charterland note that the total number of transfers has increased by nearly 27% over the total for 2010, with 1,286 transfers compared with 1,015 for the previous year (Fig.1). 

 

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This represents the first increase in the total number of transfers in any year since the peak in 2005, and follows a five year slow-down in the market.

In addition to the increase in the number of transfers, there was a very significant increase in the total value of the transfers, up from CI$259 million in 2010 to CI$497 million in 2011; the third highest year on record–after 2006 and 2007 with CI$600 million and CI$552 million respectively

(Fig. 2). This enormous increase of 93% over 2010 is also reflectedin the average value of the property transfers, with an average value per transfer of CI$388,000 in 2011 compared with CI$255,000 in 2010, an increase of 53% (Fig. 3).

 

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In reviewing the dramatic sales figures for 2011, the reader may ask whether there was any significant event, or other factor, that would account for such increases, or whether these statistics merely reflect a major recovery in the property market after the stagnation of the last few years?

Most followers of the local press would be aware of a number of acquisitions in 2011 by companies belonging to the ‘Dart Group’, the major property developer in the Cayman Islands. Therefore, in order to gauge the impact of the acquisitions by Dart on the statistics for 2011, Charterland have undertaken detailed researched of the publically available Land Registry information in order to establish the volume and total value of these purchases.

Based on their research, Charterland have established that of the 1,286 transfers registered in 2011 at least 82 of these properties were acquired by companies in the Dart Group–equating to just over 6% of the total number of transfers. Of greater significance, however, is the value of these purchases, which total in excess of CI$139 million, or 28% of the total value of all transfers registered in 2011 (Fig.4).

 

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However, in order to avoid any possible distortion to the market represented by these large acquisitions by the Dart Group, if these transfers are excluded from the overall statistics for 2011, the resulting data still shows a substantial recovery in the Cayman Islands property market.

Further information can be found in the Cayman Property Review 2011, a copy of which can be downloaded for free at www.charterland.ky
 

 

Simon-Watsosm