Residential
Single family home prices are up 18% overall year to date with the largest percentage increase coming on the smallest homes (2 beds or less) followed by the largest (4 beds or more). This is good news for the luxury home market which had been somewhat stagnant for a while. The recent grants of citizenship, the easier availability of permanent residence, and the continuation of the 5% Stamp Duty rate have all contributed to this surge. This is also true for condominiums island wide.

With regard specifically to condos the addition of new preconstruction projects has kept supply levels from decreasing overall but the supply of existing units on good beach is miniscule. Condos on the North end of 7 Mile are in great demand and very short supply. If you have been thinking of selling or tried unsuccessfully a few years ago, now would be an excellent time to get your property on the market. The best time to sell is always when someone wants to buy. Figures since our last report show a 10% increase in condo sales with an accompanying rise of 14% in average sales price. This trend should continue – especially for existing units on good beach.

On 7 Mile Beach condo presales have been brisk. Pre construction projects: the Meridian is sold out, Coldwell Banker has the only beachfront unit at the Caribbean Club left, and Waters Edge is already half sold. We understand there are only 20 units out of 91 left unsold at the Ritz at present. With the completion of the Ritz right at the start of our peak tourist season we expect a surge in value for the remaining units in that property. Historically that is always the case with preconstruction projects. A Ritz insider who knows the development well predicts the increase will be around 20%. The periodic increases in developers prices over the years have allowed early preconstruction purchasers to now resell below equivalent developers unit prices. This provides a tremendous opportunity for a savvy purchaser to lock in a profit by buying a resale in this unique project – right now. Call us for details.

You can expect several new projects along the northern end of 7 Mile Beach to be announced before the Winter Season with units ranging in price from $1.5M to $2.5M. Please contact us if you have an interest in locations North of the Public Beach. The resale market for existing condos is strong but sales are not quite at the level of the new preconstruction units. Units at the Great House and other older top level properties are falling just short of the $1,000/sq. ft. level which has long been the goal of Developers here. Bear in mind some of these units are now 15 years old. However, with the new 7 storey buildings making low density on sites a thing of the past look for these older but more exclusive properties to become more & more desirable in our market place.

The Condominium Market saw 63% more units sold over last year also with a statistical price decrease as above. However, these condo numbers do not account for any of the Ritz presales or the 12 presales at Water’s Edge, or some of the 33 presales at the Meridian, because none of them have closed. Were those to be factored in, not only would the number of sales be way up, but so would the average price - especially for the top end units. We have clients standing in line to purchase at some complex’s (Avalon, Commonwealth, Mandalay, Sovereign, Great House). We have an offer on a Ritz-Carlton resale unit at a nice profit for one of the original buyers and we have 2 more resales, one being the only PIP unit (guaranteed rental income with no fees) available. Contact us for details. The only Penthouse available at the Meridian is also listed with Coldwell Banker Cayman Islands Realty. It is 3,331 sq. ft. and selling at a reasonable $2,895,000. We also have the only oceanfront unit for sale at the new Caribbean Club project. It is a 3,000 sq. ft. 3 bedroom with an awesome 55 ft. of seafrontage (double that of Pinnacle units; only Great House can compare). As a top floor unit in a 3 storey structure with no party walls it will have 180 degree views and will be unique on Seven Mile Beach. Contact us for details on this project.

Commercial
There have been sales of several office buildings lately. Most notably the HSBC Building, Bank of Bermuda Building, Altajir Bank, etc. Rather than sales of income properties, surprisingly most of these were purchased by owner occupiers. This is a good indicator of the increasing stability of our financial sector and bodes well for the Commercial Market in general. The Kirkconnells have finally opened their new downtown retail center. It is impressive but huge and complex with significant upstairs and backside space which may not be easy to lease. Internet Financial Services has just moved into the BritCay House leaving only 15,000 sq. ft. to be leased: 3800 on the ground floor, 8,200 on the second, and 3100 on the third. Call us for further details.

Hotels
The sale of the Hyatt Hotel has resulted in their Beach Suites now being offered for sale. The price range is $600,000 to $2,700,000 for 1-3 bedroom suites, and like the Ritz PIP units, owner usage is limited to 10 weeks per year. Call us for full details. The Treasure Island Hotel is on the block (again) and the Developer of the Ritz appears close to purchasing it for staff accommodations.

Development Land
As Cayman continues to grow and attract new visitors the potential for new resorts becomes more obvious. Coldwell Banker Cayman Islands Realty is fortunate to have listed the finest development sites in Cayman: The 7 acre Pageant Beach Site in George Town, the 525 acre Colliers site in East End, the 6 acre site at Pease Bay, and the 34 acre site at Spotters Bay. Each have great potential for either Hotels, Condos or Destination Resorts. Contact us for specifics on these fine properties.

Sister Islands
There’s finally been action in Little Cayman after a significant slow period. Coldwell Banker Cayman Islands Realty has sold a lovely 1 acre beach lot at Preston Bay at $225,000 and an oceanview condo at The Club for $475,000 as well as a Conch Club unit at US$312,500. All these sales were handled by Wes Dangerfield. With the new airport now going ahead look for further increasing activity in Little Cayman.

Raw Land
A small tract of 7 Mile Beach property will have closed by the time this is published. The land was sold for $55,000 per front foot and as such will be the highest sale ever recorded although joint ventures at Pan Cayman House, Water’s Edge and the Ritz are rumoured to have sold at $100,000/ft.

South Sound is on fire lately with no less than 4 lakeside developments now under construction. With pricing for oceanfront reaching $9000/per linear oceanfront foot, in this area, lake developments common in Florida, are now happening here in Cayman. Relatively affordable, you can buy a lakeside lot for as little as CI$125,000, and live only minutes from town, schools, & churches. Call us for details.

Cayman Kai values are increasing as we predicted with Coldwell Banker Cayman Islands Realty selling two beachfront lots for $1.150 – $1.2M and a beautiful 5 bed, 4.5 bath beach front home of 5,300 sq. ft. on the tip of Finger Quay for US$2,850,000. We believe those sales of both land and residence are the highest sales ever recorded in Cayman Kai.

East End is finally being discovered and good beachfront there is commanding $5,000/ft. We have a number of interested buyers if you own there and are a seller. We are handling the marketing for a new development called East End Paradise Villas. It will accommodate 3 beachfront duplexes and 17 two storey single family inland homes around a five-tier cascading pool. One duplex is completed (with one side sold) and can be viewed. The finishes and furnishings are terrific. The 3 bed, 3.5 bath “Village Homes” are pre-selling now starting at only US$379,000. Call Coldwell Banker for full details.

For many years the older canal communities along the south shore were always good for a supply of inexpensive canalfront lots. But the days of $40,000 lots are now gone. The most recent sales in North Sound Estates for example are now in the mid $70,000’s albeit for better than average lots. Other canal communities like The Shores, Crystal Harbour, Cayman Islands Yacht Club and Sunrise Landing are very popular with residents and offshore investors alike. We have made sales in all these communities lately and at attractive levels. Coldwell Banker Cayman Islands Realty has just listed an estate site available in Mangrove Point. Facing West and fronting the North Sound, this exclusive enclave is a real sleeper. With sites of over 1.25 acre each and a private boat marina for each lot as well as a gated entrance, look for this subdivision to be very exclusive.

Tourism
Year to date arrivals were up 80% over YTD 2003 and April 2004 marked the first time they hit pre 9/11 levels. Cruise ship numbers were also up nearly 7% for April. That has been very good news for local merchants and has been reflected in increased local spending in Real Estate. New businesses are opening and established businesses are expanding. Tourism has indeed become the lynch pin of our economy and Government is right to pay increasing attention to the quality of our tourism product.

Infastructure
The new cruise ship terminal is under construction in George Town but we understand funds have been allocated for one in West Bay and plans are being drawn for one in High Rock. Although the cruise lines will fund some of the cost of this expansion, it is obvious that the Government has made serious commitments to ensuring that the cruise ship industry will continue to play a large part in our Tourism agenda. We view that eventuality with decidedly mixed emotions.

The Ritz is heading towards completion (with the opening still planned before Christmas) so is Meridian, so those West Bay Road traffic obstacles have an end in sight; just in time for the construction of the Waters Edge and Caribbean Club to begin! There is a lot of dirt being moved around behind the Galleria for the traffic circle which will encompass the new entrance to the Hyatt. We know neither the Hyatt nor the Ritz are in favour of the By-Pass and wonder how much of their influence is responsible for the slow pace of the By-Pass extension. These properties are the biggest factors influencing the timetable for completion of the By-Pass to Indies Suites, and it appears their foot-dragging will be responsible for us facing another peak season of traffic congestion further exacerbated by the continuing expansion of our market. The design of the By-Pass from Safehaven to Indies Suites is close to being finalized. It is a sensible plan which allows for a service road and landscaped buffer between the Governor’s Harbour residential neighborhoods and the By-Pass while using roundabouts for access points. It is refreshing to find that PWD is now using a more practical approach to road design whereas previously it was largely theoretical.

Banking
With interest rates still low and CD rates even lower the attractiveness of Real Estate brings mortgages into play in Cayman more than ever before. The key to being a top bank in this area is personnel and that has a habit of changing in Cayman too often. Difficult and inefficient loan officers are the biggest complaint we hear from customers regardless of the bank. All too often there is no follow up by the loan officer to make sure the required paperwork is being processed in a timely manner and when Realtors, who are sensitive to deadlines, try to help they are told to stay out of it even when they referred the customer to the bank in the first place. This sort of attitude leads to situations we have increasingly encountered lately where closings are needlessly postponed because calls were not returned and paperwork is not complete. We have actually gone to closings to find the bank does not have the money ready! It’s almost as if contractual deadlines do not apply to the banks. One of these days a seller is not going to be amenable to a postponement and a deal will be lost and a deposit forfeit. Then there will be lawsuits and the parties will belatedly recall the significance of a deadline. There are exceptions to this rule in each bank but unfortunately it is usually only someone in upper management who will go out of their way to get something done on time. It is a shame, however, that the average loan officer hasn’t a clue as to what it takes to do his or her job properly and these are the people who handle the bulk of the customers. Accordingly, although we have had great results when dealing with the upper management, based on the service received from the rest of the staff we are unable to give kudos to any particular bank in this issue.

Kudos
Kudos have to go to Coldwell Banker Real Estate Corporation which was ranked #1 in a J.D. Power survey of both first time home Buyers & Sellers! This is based on 1.1 million buyers and sellers. Over 114,000 sales agents from 3,500 offices in 29 countries accounted for $268 Billion in sales (more than any other real estate company). This included nearly 14,000 million dollar homes last year.

Special
Many people have heard the old adages about Real Estate but when making a purchase they are often forgotten. Here’s one worthy of remembering. Homes in popular and affluent communities tend to increase in value more rapidly than those in less sought after, middle class neighborhoods. That’s why real estate professionals frequently advise home buyers to choose a smaller home in a better neighborhood over a larger home elsewhere. Taking that further, if you are looking strictly for an investment, it is wise to purchase a quality piece of raw land than an inferior improved property. In Cayman, with no property taxes, that is a viable and no maintenance investment option.

Forecast
There is a definite aura of optimism within the property market and the Cayman economy as a whole. Confidence in any economy is the foundation upon which further prosperity is based. With the number of sales pending completion now at 43% over our last report and the value of those sales at 30% over our last report one would expect strong second half numbers. Although some of those pending sales will remain pending for several years as they were preconstruction sales in projects which will not be completed this year, with all the basic factors still in place which led to such a strong first half there is no reason to believe that we should not expect more of the same relative to seasonal corrections. Therefore we expect continued sunny skies and a high economic temperatures for the second half of 2004.