Residential
37% more single family homes were sold over the past 12 months but at sales prices nearly 30% less than previously, so purchasers have been reacting favorably to lower prices. The supply of homes is about the same as last year so prices are not likely to rise immediately. The only area where prices rose in this sector was 3 bedroom homes which would indicate a greater demand for smaller homes. The largest and finest home ever to be marketed in Cayman has just been listed by Coldwell Banker Cayman Islands Realty. This fine Previews Property called Casa Coyaba is 18,500 sq. ft. of incredible but practical luxury on 120 ft. of Old Prospect Beach. There is not enough room for us to do this amazing property justice here; for the moment let’s just say this home compares favorably with the best worldwide. Contact us for a detailed description.

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
Several licenses have now been granted to new phone companies. Unfortunately for the public, none are up and running yet. These new companies will help absorb some of the excess office space in George Town. Prime office space is still available in the BritCay and Genesis buildings. Call us for details. Vacancies in some of the prime retail shopping plazas are beginning to be absorbed after 2 years of sluggish activity. As you might expect with the commercial space still in oversupply, commercial land sales remain slow. That will change quickly if our market continues this pace through 2004. Commercial property in the West Bay Road corridor will probably be the first to rise and parcels in that area still priced in the $10-12/sq. ft. range are good buys.

Development
Two qualified groups are currently interested in the Proposed Port Site in High Rock. If a deal can be struck, it will be interesting to see how quickly activity will begin on this very ambitious project. Long term it is necessary for the continued growth of the island. The Old Fort Building has just been demolished in George Town to make way for the new cruise ship terminal. Hopefully when it is completed cruise ship passengers will be much more comfortable. But as far as the congestion in town due to too many people and too many cars, that won’t improve until sensible limits are set on the number of ships allowed in each day.

Sister Islands
Coldwell Banker has just opened an office on Little Cayman. A long term Little Cayman resident, Wes Dangerfield will be handling listings and sales for us over there. We expect that the full time presence of a responsible individual from a well regarded company with an extensive support network will provide a welcome alternative for people wanting to buy and sell there. With the announcement of Cayman Airways resuming flights to Little Cayman and the anticipated ground breaking of the new airport, the future of property values on this little gem looks extremely positive. Contact Wes for Little Cayman information at 345-926-1504.

Raw Land
Coldwell Banker has just contracted 2 beachfront parcels in Cayman Kai for one of our customers which will establish new sales records for the area. We will announce those prices when the deals are closed. Although we mentioned in our last issue that we expected to see more activity up there, and we have, we are not expecting a trend to be set at these new levels because the property itself was so unique. We have sold much of our inventory and are actively soliciting reasonably priced listings for quality beachfront properties in Cayman Kai and East End due to the increasing interest in beachfront parcels coming through our offices.

Tourism
Sports Tourism is the newest aspect of the Tourism arena. Supported by Coldwell Banker, the Holiday Inn, CUC, and Cable & Wireless among others, world record holders Marion Jones and Tim Montgomery will be training and giving clinics in the Cayman Islands for the month of January. Also participating will be Kareem Streete-Thompson, Cayman’s own Olympic hopeful who is evidently in the best shape of his life. The Swimming Association will hold World Swimming Week here Oct. 12-17, 2004. This will feature world class swimmers like Michael Phelps, Ed Moses, Jenny Thompson and many more for both pool and open water competitions. Both of these worthwhile programs need financial support to continue their success. Anyone who can help in any way, especially in terms of providing gratis accommodation, is encouraged to contact us.

Infastructure
In our last issue we announced Governments funding of the work to complete the West Bay Road By Pass within a year. We knew we would get no relief this season, which is unfortunate but bearable if relief was in sight. However, there has been very little accomplished in this regard thus far making that schedule unlikely to be met. We hope the Government understands the need for this project to be a top priority. We’ll see…

The Governments’ granting of Cayman Status to more than 2000 persons since our last issue was a shocking development. On the one hand it righted many wrongs by giving citizenship to a number of deserving long term residents who previous Governments had completely ignored. On the other hand, the influx of so many new Caymanians, some of whom had not been here very long, cannot help but have an impact on our work force.

Speaking of labour, we have now seen the final draft of the proposed Employment Bill which outgoing Minister Roy Bodden sees as his governmental legacy. Many groups loudly criticized the last draft and we believe those criticisms were well founded. We quote the Chamber of Commerce: “The Law aims to overregulate employment relations, and micro-manage business. This does not promote good business practice or relations. It is not a progressive step, and it is felt that the proposed changes will have far reaching negative effects on an already sluggish economy and a private sector already finding it difficult to meet all the changes, regulations, and increases imposed over the past years.” If the Government does not heed these warnings and continues along the path of letting the tail wag the dog, we can expect nothing but higher costs and the same difficulties being experienced by the other countries who have previously taken the same path. Complain to your MLA!

Legal
We are concerned that Minister McKeeva Bush may not be able to stand firm against the UK on the issue of the EU Withholding Tax. While this will apply only to EU residents not EU citizens who reside in Cayman, we wonder how much European business this will cost us? This issue is one of several which has threatened Caymans continuing colonial relationship with England. In this case, and in any other subsequent clashes with the UK, we face a continuing “my way or the highway” attitude from the British, so Mr. Bush certainly has his work cut out for him in that regard. And with every ensuing conflict the “highway” becomes more inevitable.

Kudos
At the 11th hour the Government announced a further 60 day extension of the 5% Stamp Duty level. The Government departments are pushing hard for a return to previous levels (7 1/2 – 9%). The Ministries on the other hand recognize the significant positive impact the duty reduction has had on the Real Estate and Construction industries. Let’s hope the politicians win this argument and opt for a controlled slow upward movement of fees topping out at the traditionally well accepted 7 1/2% level. The current extension expires at the close of business on January 11, 2004. Those who cannot complete pending transactions before then should be aware they can “stamp” the contract (prepay the duty) at the current rate.

Special
A tip for those selling properties. A good realtor will do a CMA for you (Comparative Market Analysis) free of charge. In it he should provide market data to support his estimation of value and suggested listing price. In the end the market determines value not the owner or the realtor, so historical sales data coupled with the realtors understanding of market conditions is the best basis for value. When, in our very competitive local brokerage arena, one agent suggests a listing price which far exceeds what the data tells you be on your guard. It’s called ‘blowing smoke’ – and it is part of the reason the average marketing time for properties in Cayman is so long. This agent is often the least competent, yet he is often the one chosen to list because he quoted the highest price and fuelled an owners unrealistic expectations.

A quick heads up for those of you buying property here. Under the rules of CIREBA (Cayman Islands Real Estate Brokers Association) if a Purchaser signs a Preliminary Offer sheet which is “subject to formal contract”, even if a deposit is placed that property remains on the market for sale until a formal contract is signed by both parties. Contracts which are “subject to formal contract” protect nobody. Too often we see customers lose a property by going this route. The safest route for a purchaser to take is to sign a CIREBA Offer to Purchase, which includes the conditions you need. This protects you and it allows us to take the property off the market so you don’t lose it while you are waiting for a formal contract to be produced for you

Forecast
It would be foolish to expect boom times because of the inherent balance sheet weaknesses of all the worlds’ economies. There are still hard lessons to be learned before fundamental economic strengths will provide foundations for sustainable long term growth again. However, in the short term, and speaking relatively, all systems appear to be “go”. The US economy is strengthening (labour figures notwithstanding), the stock market is up, interest rates are still low, terrorism has not made any local appearances lately, Caymans supply and demand curves are looking healthy and Winter is quickly descending upon Canada, the US and Europe. It is difficult to feel anything but optimistic about the coming season. We look for prices on quality properties to begin to rise and generally expect sunny skies all Winter.