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A look at the real estate market with Property Cayman

Local News 11 May, 2023 Follow News

Michael Joseph

Is Cayman’s fast-paced real estate industry facing a slowdown in line with many countries around the world? The Caymanian Times speaks with Property Cayman Broker/Owner Michael Joseph to find out more.

Rising interest rates, rising mortgage rates, a general slowdown in the global economy, high inflation, all are impacting real estate markets globally. In the medium term, Michael says he believes each sector of the market acts and reacts differently.

“Whilst ticking along at the higher end, the market has slowed in the mid-to-entry level range. And while the Federal Reserve announced a further 0.25% interest rate hike on May 3rd, the rate of increase is slowing, and even more importantly, there is no talk of further hikes in the immediate future,” he advised.

He believed this signals a pause in the fight against inflation, which he says bodes well for their market projections.

“Cayman’s current supply (inventory of homes available for sale) is extremely low, and with stabilising interest rates, we can confidently project an increase in demand in an already strong market,” he states.

This should have the effect of encouraging the return of buyers, particularly in the mid-price range, with renewed confidence putting further upward pressure on pricing. He believes the rate of increase in property value, which has slowed, will climb in the coming months.

Cayman’s real estate market parallels other jurisdictions with respect to low inventory and a softening of demand due to mortgage rates. However, due to global political changes, Cayman is “uniquely positioned”, Michael feels. Changes to economic policies abroad have bolstered the Cayman offering internationally.

Most developed real estate markets can expect a returned increase in sales. Cayman will not differ in this regard, he says.

Real estate is a long-term asset, i.e., over time values always go up. Michael says as a result, use time to your advantage.

“Be patient and make safe informed choices that will serve you for the next 15 years, not just today,” he advises.

Would-be buyers and sellers ought to save up and keep their fingers on the pulse of the market.

“Buyers should consider their long-term property plan and make decisions based on the stepping stones to get there,” he says. “If it is in your property plan to purchase now, proceed within your means. If you stall, interest rates will come down, but pricing will go up. Sellers should equally consider their property journey.”

Sellers need to be clear about their motivation and, whether they are listing next month or next year, they should not neglect the upkeep of their property.

“Well-maintained homes not only hold their value but grow in value,” he says. “Discuss any major repairs, minor renos, or upgrades with a professional to understand what upgrades will give you the best return on your investment. And lastly, understand the market movements because the pricing and marketing strategy of your home is paramount.”

Knowing the cycles, the supply and demand, and how the market ebbs and flows is critical to mapping out a journey as a first-time buyer, Michael feels.

“Consider how the island is growing and look to areas where growth and changes to infrastructure will increase property values. Be informed and educate yourself so you can get ahead of the curve. Stamp Duty saving schemes should be taken advantage of when getting on the property ladder. And as always, the very best advice is to watch your expenses and save as much as possible,” he advises.

Michael says that, just like the shifting market, Property Cayman is not sitting still and has some innovative help for buyers.

“We are constantly looking for different ways to be efficient and effective, adapting to the ever-evolving market so we can better serve our clients and the community alike. Recognising the affordable housing issue in Cayman, we implemented Property Cayman Cares (https://www.propertycayman.com/community/ ) at the end of 2021.”

Still in a very early stage, the initiative is aimed at helping young Caymanians get on the property ladder and then providing helpful resources to climb it through time.

“The plan isn’t just to generate money but to collaborate with other stakeholders in the industry to make a lasting difference,” he says.

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