The outlook is quite promising

 The last 18 months of this decade will go into the record books as one of the most tumultuous times, ever – not only for real estate sales, but financial markets and business overall.  It is a fitting end to a difficult decade, which has challenged most of us in the Cayman Islands, starting from the year 2000. 
 
While we have endured a roller coaster ride of one shock after another, this decade, as we enter 2010 there is a renewed hope of better times ahead.  Our new government is taking the necessary steps to bring business and better economic conditions back to this country. We should start seeing the upshot of that during the next year.
 
In 2010, we will see some major projects moving forward:  WaterColours on Seven Mile Beach under construction; Island Resort and Residences in Colliers naming their five star international hotel brand and starting construction; the George Town port starting development; medical tourism gaining a foothold and starting site work for their 2,000 bed hospital and ancillary buildings; Camana Bay is looking at further expanding their town centre and moving forward with development of their residential component; and The Ritz-Carlton constructing Secret Harbour and starting development of their Dragon Bay site.
 
Certainly, from a real estate standpoint, there are indications that real estate activity is beginning to rise up from the doldrums already.  This is especially true for our resort markets of Seven Mile Beach, Cayman Kai, and the East End to Colliers area.  These markets have finally bottomed out and are now generating increased sales and showing improved demand.
 
As an example of the recovery to our resort market, during the first six months of 2009, there were a total of only 21 condominiums sold on Seven Mile Beach.  This compares to an almost double amount of 40 sold in 2008, and triple amount of 63 sold in 2007. 
 
However, for the second half of this year, up to 30 November in 2009, there were 33 Seven Mile Beach condominium sales compared to just 18 in 2008 and 25 in 2007.  Our overseas purchasers have started coming back and results indicate strong resort market sales from the summer of 2009 up to now.
 
Reflecting back, it would appear that prices and activity in our real estate market seemed to bottom out over the early summer.  It wasn’t until late summer that we could distinguish an improvement in buying activity from overseas visitors and investors.  Our resort real estate market went from falling off a cliff in September 2008 to seeing momentum begin to pick up, again, by the second half of this year.
 
While it is still very early in this recovery, the outlook appears quite promising.  We have some major projects and developments ratcheting up in 2010.  This does not even account for several other projects that were put on hold until market conditions improved.  These shelved developments could come back onto the market, at any time, now that demand is improving.
It appears that 2010 will be a year of consolidation and selling down of inventory.  By 2011, the market should be poised for the start of some good capital appreciation, due to stronger demand and less supply, as well as a potential increase in inflation.

KimLundMm

Lund Report by Kim Lund, RE/MAX Cayman Islands

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