STAYOVER TOURISM IS GROWING

Until recently, the Cayman Islands had only around 4,500 hotel rooms; even factoring in villas and condos, the total short term rental inventory amounted to under 8,000 rooms prior to the pandemic. However, in 2019 – before Cayman closed its borders and put tourism on pause – the number of stayover visitors reached 500,000 for the first time.

With the return of tourism, that figure is expected to grow. Indeed, several new hotel developments, including Kailani by Hilton, Mandarin Oriental, Indigo, Hyatt and One GT, are currently underway, pointing to stayover visitors becoming a far larger slice of the tourism pie.

This inevitably means that demand for short term rental accommodation will grow in the coming years. Given that available hotel rooms are limited and that in a post-pandemic world, some visitors will be seeking more secluded, crowd-free escapes, villas, condos, and Airbnb’s will become increasingly sought after.

SHORT-TERM RENTAL PROPERTIES

It is a relatively new sector in the real estate market, but for investors looking to earn a solid return and acquire an asset that will appreciate over time, a short-term rental property will be a lucrative option.

Over the long term, investors can expect to see an average of 10% ROI from short-term rentals, which compares favourably with alternative investment strategies. And with property prices on the up and up – some property prices have doubled in the past five years – there is huge potential for capital growth. 

Of course, the rebound of tourism will also create a need for new workers on-island who will require long term accommodation. For those seeking the certainty of a regular income and the convenience of an annual rental contract, long term rental properties are also set to be a sound investment. 

A BOOMING MARKET

Despite the absence of tourism over the past two years, the property market in Cayman has remained buoyant. As has been the case in many other countries, demand has been strong, but inventory has been decreasing, and, as a result, prices are on an upward trajectory. 

As an illustration, in 2020, the total value of all real estate listings was $1.47 billion. In May 2021, the total value exceeded $2 billion for the first time and has remained above that mark ever since – even though the total number of listings decreased.

Even at a time when rising interest rates and inflation will limit some buyers’ ability to borrow, it is the scarcity of available properties in Cayman that will ensure demand stays high, and consequently, prices are pushed up. That scarcity is unlikely to change any time soon, so the best advice for those considering investing in real estate in Cayman is: be prepared to act fast.