Can the property boom continue?

By Lindsey Turnbull

The recent RICS Cayman Islands Property & Construction Conference held at the end of April at The Ritz-Carlton Grand Cayman looked at assessing the question that is on most home-owners’ and would-be buyers’ minds right now – can the property boom continue?

RICS is the global professional body promoting and enforcing the highest international standards in the valuation, management and development of land, real estate, construction and infrastructure. The organisation works at a cross-governmental level, delivering a single, international standard that supports a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all. This is the fifth year of the Cayman conference, with the topic this year: Building a sustainable and climate resilient future for the Cayman Islands.

Conference committee member Stephen Still, MRICS, a Senior Valuation Surveyor with BCQS International, said that, as they outlined in their Valuation Uncertainty and ESG (Environmental, Social, and Governance) breakout session, they believed that the fundamentals that drove the local market appeared to be strong at the moment.

Moderated by Uche Obi, the government’s Chief Valuation Officer, the session saw Eric Allen, RICS Americas Board Member, Chair of the RICS Caribbean Advisory Group, James Andrews, Senior Managing Director, Integra Realty Resources and Mr Still discuss issues such as global valuation uncertainty, focusing on the Caribbean.

With regard to the Cayman Islands, Mr Still said: “The employment market is strong and there is available credit with local mortgage lenders having good liquidity. The Cayman property market is complex, with many different bands or levels – some of which will be more sensitive to external factors than others. Increasing inflation, supply chain issues and the purported series of rises to the US prime rate will likely have an effect on some areas of the local market.”

The pandemic definitely made an impact on Cayman’s property market, but that was short-lived and Cayman has seen a rally in property prices like never before.

“The property market was initially impacted by the onset of the Covid-19 pandemic. But high demand, low supply, increased liquidity due to the inability to travel and the government pension release scheme perpetuated a rapid recovery,” Mr Still confirmed.

Cayman was now seeing unprecedented prices being achieved across all levels of the residential property market.

Affordable property for all

However, while the boom in property prices might be great for owners, the downside is of course that it makes it prohibitively difficult for people to get on the property ladder in the first place. At the conference, there was discussion on whether Cayman might introduce some type of restriction on foreign ownership, which may thereby free up more property for the local market.

“The idea that foreign money has helped push up prices in the local market has been around for some time and has become a hot topic of debate among local residents,” Mr Still said. “In our view, the main issue is supply across all levels of the property market and restricting a particular profile of buyer will only have a nominal if any effect on property prices. In any case any such a rule would go against what we stand for as country by discriminating against people on the basis of nationality.”

Mr Still said in order to make homes affordable in this current market they believed there needed to be a joint effort from government and local developers to reach a solution on affordable housing.

However, he warned: “This is not likely to be achieved in the short term.”