Real estate sector: “Luxury real estate, a low impact alternative to mass tourism”
Luxury real estate development has a key role to play in the future of the Seven Mile Beach Corridor and in driving the Cayman economy, real estate insiders believe.
Michael Joseph said international demand for beachfront homes in Grand Cayman is at an all-time high at a time when there are fewer properties on the market than ever before.
Solving this enigma in a sustainable way is the key, according to him, to manage the future of the beach and its surroundings.
Joseph, who owns and operates Property Cayman, said Cayman’s successful COVID response has created a further surge in demand from investors who view the islands as a haven in a chaotic world.
He acknowledges that there are environmental concerns about the over-development of the beach, but believes these can be addressed with good design and planning.
He said a series of new projects, including the development of Lacovia – which will replace the old condominiums – have been designed in a more sustainable way than what they replace.
In a post-COVID world, Joseph believes wealthy real estate investors may actually provide the island with a better return than mass tourism.
“Luxury property owners are best viewed as long-stay tourists who spend a lot and have the greatest economic impact with the least environmental impact,” he said.
“Cayman could perhaps become a luxurious and exclusive place with an emphasis on quality over quantity.
Rival Visions of Seven Mile Beach
“The economic impact of a single wealthy visitor far exceeds the income generated by many cruise ship passengers and does not cause traffic or major environmental concerns.”
While some question the impact of development on the Cayman economy, Joseph points to construction jobs, the relatively high purchasing power of luxury property owners, and direct government revenue through stamp duties. among the main advantages.
During the foreclosure, Joseph says, he sold the most expensive house in Cayman history – a $ 14 million property in Vista Del Mar. For that sale alone, the government collected just over $ 1 million. of tax dollars.
In 2019, according to Simon Watson of the Charterland surveying company, the government removed $ 76 million – 7% of its total annual revenue – from stamp duty on real estate sales.
The number declined slightly in 2020, but the $ 60.5 million withdrawn from this source has been highlighted by the government as one of the reasons the country’s finances are still in reasonable condition despite the impact of the pandemic.
Watson cited taller buildings with deeper setbacks and an increased number of developments that follow Lacovia’s formula – demolition and replacement of older properties with more recent luxury offerings – as the likely model for future development of the beach.
“I see a continuing trend for older, less densely developed condominium developments to be bought out for redevelopment with denser, higher end developments, as we’ve seen previously with the old Caribbean Club and now in Lacovia. “
He said that a further increase in the number of floors allowed would be a way to balance environmental concerns of beach erosion with the needs of developers.
- This story is part of our “Seven on Seven” reporting series this week which examines the future of development in the Cayman Islands, and the Seven Mile Beach Corridor in particular, from several angles.
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