Last year, 2012, will be remembered as the year when the Cayman Islands Government announced (and quickly renounced) the possible introduction of the “expat tax”. More notably, it was also the year when Premier McKeeva Bush was arrested as part of a corruption investigation and then subsequently ousted from the government by members of his own party.
It is against this turbulent political background that Charterland has undertaken its eagerly awaited, fifth annual independent review of the Cayman Islands property market.
The review, undertaken by qualified chartered 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 2012.
Based on Charterland’s analysis, the total number of open market transfers registered with the Cayman Islands Government’s Land Registry for 2012 was 1,141.
This represents an 11 per cent decrease on the total number of sales for 2011 of 1,286, although the total number is still up on what was the low point in the market in 2010. (Fig 1).
This decrease in the number of transfers in 2012, when compared with 2011, is also reflected in the total value of the sales, with total sales of CI$367.75 million being registered in 2012, compared with CI$497 million for 2011.
This represents a 26 per cent drop in the total value of sales from 2011. As with the number of sales, though, this figure is still up from the low in the market in 2010 when the value of the sales totaled only CI$258.5 million. (Fig 2).
A similar pattern is reflected in the average value of sales, with an average of CI$322,000 for 2012 down 17 per cent from the average of CI$388,000 for 2011, but still up 26 per cent from the low of CI$255,000 in 2010. (Fig 3.)
Readers of last year’s edition of the Cayman Property Review will recall, however, that the figures for 2011 were somewhat distorted by several acquisitions of substantial property portfolios by companies belonging to the Dart Group.
Based on this analysis, Charterland assessed that these acquisitions represented just over six per cent of the total number of transfers for that year and, more significantly, 28 per cent of the total value of all transfers registered in 2011.
Therefore, if we are to examine the figures for 2012 against the data for 2011, adjusted to exclude the Dart-related transfers, we note that although the total numbers are still slightly down on 2011, 1,141 against 1,204 for 2011 (Fig 4.), the total value and, significantly, the average value for 2012 shows and actual increase over the preceding year.
Ignoring the Dart acquisitions, the total value of transfers for 2012 show a three per cent increase over the adjusted total of CI$358 million for 2011 (Fig 5), whilst the average value for 2012 indicates an eight per cent increase over the adjusted average value for 2011 of CI$299,000 (Fig. 6).
Therefore, if we are to look at the market, free from the distorting influence of the substantial acquisitions by the Dart Group in 2011, the market for 2012 does appear to show a continuing, albeit slow, uplift in total and average values per year since the low point of 2010.
However, the drop in the total number of transfers for 2012 from even the adjusted figures for 2011 shows us that the market is still considered to be stagnant compared with the “boom” years of 2005 and 2006, and that any perceived recovery in the property market can still be considered a fragile one.
Further information can be found in the Cayman Property Review 2012, a copy of which can be downloaded for free at charterland.ky