Few surprises in 2012 property market

There’s good news and there’s bad news to be gleaned from the performance of the Cayman Islands property market in the first part of 2012. 

 

Those looking for a rebound or a freefall won’t readily find either in the statistics posted during the first five months of the year, which continued to demonstrate recent trends of a relatively few number of transactions of a relatively high average value. 

From January to May, the Lands and Survey Department recorded nearly 700 freehold property transfers, which includes but is not limited to sales, worth about $182 million in total. 

 

Mixed bag 

On a positive note, the average value of each transfer (about $260,000) was greater than the average value posted for the same period in each preceding year since 2006 – with the exception of 2011, where the data were skewed by the Dart Group’s acquisition of a patchwork of high-dollar properties from Georgia-based developer Stan Thomas. The average value in 2012 is down 62 per cent compared to 2011. 

The average value of transfers so far in 2012 was 40 per cent and 48 per cent higher than the average value in January-May 2010 and January-May 2009, 
respectively. Perhaps more impressively, the average value in 2012 was 6-15 per cent higher than average values in 2006 to 2008, before global and local property market crises. 

On the flip side of the coin, the number of transfers in the first five months of 2012 continues to slide along a broader downward trend. Compared to the same time period in previous years, the number of transfers in January-May 2012 is down 2 per cent from 2011, 4 per cent from 2010, 13 per cent from 2009, 31 per cent from 2008, 11 per cent from 2007 and 41 per cent from 2006. 

With the average value of transfers generally up, and the number of transfers generally down, it follows logically that the total value of transfers is mixed, compared to previous years. 

The total value of transfers in January-May 2012 is down by 40 per cent compared to 2011, down by 27 per cent compared to 2008 and down by 38 per cent compared to 2006. However, the total value in 2012 is up by 41 per cent and 21 per cent compared to 2010 and 2009, and is also 3 per cent greater than in 2007. 

Compared to the average data posted from January-May in 2006-2011, the statistics from January-May 2012 show a greater average value per transfer, fewer transfers and overall lesser total value of transfers. Compared to historical averages for January-May, the average value per transfer in 2012 was up 4 per cent; the number of transfers was down 20 per cent; and the total value was down 16 per cent. 

Those observations still hold true even after exempting the exceptional year 2011 from the historical average. Comparing 2012 numbers to averages for January-May in 2006-2010, the average value per transfer was up 21 per cent; the number of transfers was down 23 per cent; and the total value was down 9 per cent. 

 

Compared to 2011 

While the 2011 numbers were heavily influenced by a relative handful of major transactions, the 2012 property market has performed progressively better than last year as the months have gone by. 

In January and February 2012, the average value, number and total value of property transfers were all down significantly compared to January and February 2011, respectively. 

While the average value and total value of transfers was still down in March 2012 compared to 2011, the number of property transfers was up by 22 per cent. 

In April 2012, the number and total value of transfers were both up compared to April 2011, though the average value was still down by 3 per cent. 

In May 2012, the average value, number and total value of transfers were all up compared to May 2011, by 17 per cent, 25 per cent and 46 per cent, respectively. 

 

Monthly performances 

The Lands and Survey Department has data for the past 77 months on record, going back to January 2006. 

In 2012, four out of the five months ranked in the top half, historically, in regard to average property values. By this measure, January 2012 ranked 19th out of 77; February ranked 12th; March ranked 20th; April ranked 39th; and May ranked 29th. 

Conversely, four out of the five months in 2012 ranked in the bottom half in regard to number of property transfers. By this measure, January 2012 ranked 71st out of 77; February ranked 61st; March ranked 30th; April ranked 70th; and May ranked 50th. 

In regard to total value of property transfers, two out of the five months in 2012 ranked in the top half, two ranked in the bottom half, and one ranked right at the median point. By this measure, January ranked 55th out of 77; February ranked 34th; March ranked 20th; April ranked 62nd; and May ranked 39th. 

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