Community
Big Drop in 2001
Real Estate Sales
A clear indication of the downturn of the local economy is evidencedby the recent report issued by the Land Registry last week.
Land sales in the Cayman Islands slowedduring the first quarter of 2001. According to the Registry figures,the value of sales slid 28 percent to $51 million, compared tothe $71 million recorded for the corresponding period last year.
A similar picture was reflected on CaymanBrac where $61,000 was paid in stamp duty during the quarter. This figure represents 26 percent less than the $81,929 collectedduring the same three months of 2000.
First quarter land transfers totalled 378;134 in January, 104 during February and 140 for March. Stampduty accruing from these transfers and chargeable at seven-and-a-halfpercent (except for the Seven Mile Beach Peninsula area whereit is 9%) was just under four million dollars.
According to one local real estate industryanalyst: "this is the worst performance seen in recent years".He went on to say, "The glut of new apartments which havebeen completed and others nearing completion and adding to theinventory, have had a negative impact on the industry".
It is known that some developers are resortingto putting the units they planned on selling into the now burgeoningrental pool sometimes at up to 15 percent less than therates originally advertised. Proof of this is 'For Rent' signsare now seen frequently along with the preponderance of 'For Sale'signage throughout the Island.
The new Government has expressed its desireto jump-start a programme which will provide affordable housingto those in need. Addressing this, the real estate analyst expressedhis "dismay in this regard" because of the existingzoning requirements which rule out a higher density of home sitesper acre.
"Developers and individuals shouldbe allowed to construct their homes on lots that are six to eightin an acre" he said. " If this was possible, then thefront end cost of land will be reduced, so that money could bespent on construction instead of up to as much as 50 percent onthe land alone. This will greatly reduce the overall cost of homes,especially those in the lower to medium income brackets."
Omitted from the Land Registry figures arethe 111 transfers of land for natural love and affection, whichoccurred between January and March. Such transfers attract anominal stamp duty of $50, plus a $20 registration charge.