It is hard to remember a worst time for the real estate industry in the Cayman Islands.
We have seen some tough recessions over the years and even weathered the aftermath from a natural disaster as severe as Hurricane Ivan. Yet, we have never had a financial hurricane like this lingering global crisis. The market seems to have now gone from bad to worse, after giving us a glimmer of hope, earlier this year.
Over this last winter season, our real estate market appeared to be starting a slow recovery. In the first quarter of 2010, we were up slightly in real estate sales over the same period in 2009. But now, in June, we are off by about 14 per cent compared to 2009. The real estate market fell off another cliff in late April.
Despite this current recession, it is not all doom and gloom, even though it can be hard to look beyond our current challenges. There is some good potential for a gradual turnaround for the real estate industry, potentially starting this coming winter season 2010/2011.
If we can survive this downturn, looking ahead, there are some demographics that could benefit our real estate industry and economy over the long term. The USA “Occupational Employment Projections to 2018” reports some interesting statistics, that can have a huge impact on us in the Cayman Islands, as per below:
“Between 2008 and 2018, the author’s note, the 65-74 age group will grow by nearly 44 per cent and the 55-64 group will grow by nearly 40 per cent. Again, these people have already been born. We know how many there are.”
“Here is a list of the 10 biggest growth numbers from 2008 to 2018 (in hundreds of thousands) for what the authors call “encore” jobs:
- Primary, secondary and special education teachers 647.3
- Registered nurses 581.5
- Home health aides 460.9
- Personal and home care aides 375.8
- Nursing aides, orderlies and attendants 276.0
- Medical assistants 163.9
- Licensed practical and licensed vocational nurses 155.6
- Business operations specialists 147.2
- General and operations managers 143.2
- Child care workers 142.1”
These demographics indicate two potential trends that should impact the Cayman Islands. Firstly, tourism and real estate activity for second (vacation) homes will pick up dramatically, as this market of potential real estate purchasers and travelers increases by 40 per cent to 44 per cent, over the next eight years. The aging population of US retirees will have more time to travel and seek out warm tropical destinations, for both vacations and investment in vacation homes.
Secondly, medical tourism will become an increasingly strong industry, as evidenced by the surge in aging Americans, as well as the vast amount of medical related jobs that the researchers anticipate will be required. With the recently announced Dr. Shetty hospital and facilities, the Cayman Islands will be well positioned to be on the cutting edge of this industry and will enjoy the associated economic benefits that will result. The rampant growth in the USA population, for those at ages 55 to 74 years old, will increasingly burden the medical facilities in the USA and force many of these patients to look elsewhere for affordable medical treatment.
It would appear that the middle part of this decade should show some good improvement for real estate activity and the Cayman Islands’ economy overall. We just need to still be in business, at that time.