There is a lot of talk in regards to the Roll over policy and there seems to be a lot on the market as well as a lot of new construction either on the market or coming on line, what are your feelings on what is happening in today’s market?

Yes, you are right there is a lot of talk or speculation in regards to the roll over policy, but keep in mind most of this talk has happened before the proposals were even printed for people to take a look at. This I think has had a lot of negative impact on the market and in most cases, I believe it is unfounded. Yes, the roll over policy may effect how much time someone can stay on the island, mind you there are exceptions to the rule so it does not mean every one that comes here will have to leave within seven years, it is really based on the job you do and the position you hold within a company. Everyone has to keep in mind as well, this roll over policy is not new; this has been in effect for the last three years already. And within these three years, there have been a lot of factors that have affected the market such as Ivan, stamp duty rates, interest rates etc., yet the market has still been active.

Ex patriots have been coming to the island for years on work permits that have been valid for periods of one or two years, and in some cases more. There was and never has been a safety net for a person to know one year to the next if their permit was going to be renewed. Jobs always have had to be advertised, and if a suitable Caymanian were to apply for that specific job and had the qualifications necessary to perform the job, the permit for the ex-pat would not be renewed. Yet the market was still active. Banks were lending to people on year-to-year permits and have indicated that they will continue to do so, should you meet the criteria for the loan.   Personally, I think the negative press, along with comments from other Realtors, before the facts were known, have all had a negative effect on the market as we see it today. I feel and trust these negative effects will be relatively short lived, do you really think people are going to want to rent for seven years? I am not convinced of this, seven years is a very long time to be renting. I personally do not, I think they may take a year or so to settle in, then look to purchase something for the remainder of their tenure, so if and when they leave they have something to show for their time here. If it is not an investment property to hang on to at least it could be a little money in their pockets.

Even if the market does take a slight dip for a time due to people’s uncertainty with the goings on, this will only open or develop a stronger rental market, which in turn will attract more investor buyers who are looking to invest in properties to rent. People are still coming to the island to work, whether it be related to a position being rolled over or a new position needing filled, these people still need places to live, this will not change, if anything it will get stronger as new business develops and tourism increases to our Islands bringing with it more jobs and more people required to fill these jobs.

There are many new project which have been announced recently or are getting ready to be announced as of late in various locations across our three islands, new hotels, condotels, private residence/ ownership clubs or resorts etc. even if half of the projects slated actually some to fruition, the increase in residents along with tourists and investors, will go along way in filling our properties whether it is to rent or to purchase, these people will have to live or stay somewhere.
 
Now, we keep hearing there are so many places to rent in the papers these days, yes there is but we have to remember we are just now coming back up to pre Ivan levels and if we remember back to before Ivan there were lots of options out there for people.  Having options is good; you now have a choice of where you want to live.  We have become so used to the inventory not being there because of the storm, and having to take the first place that became available no matter what the price, we are not used to having a choice. With choice comes cost savings, we all saw rent prices sky rocket after the storm, some people were taking advantage of the shortage of housing and raising rents to levels people could barely afford, now that there is more available these prices are coming down to a more palatable level.  I understand landlords costs have defiantly gone up to carry properties with Insurance premiums almost doubling and in some cases more than that so I don’t think we are going to see rents fall to pre Ivan levels any time soon, but I do think they will correct to a level that affords people a choice of where they want to live rather than where they have to live.
 
As I mentioned above we are seeing the rental market start to go through what I call a slight correction, this is due to supply and demand. More product available affords more choice for renters. We are seeing a lot of people “flipping” from one unit to another that are perhaps a better quality with better amenities, in a better location, or are a better value than what they had been forced to take previously.  As I had mentioned earlier, prices are coming down slightly but not drastically, property owners are now having to pay a considerable amount more in fees in a lot of cases to carry their units so I do not believe rents are going to come down too much lower in the very near future.  Perhaps when we have a couple of years of good weather with no insurance claims we may see our premiums coming down then perhaps rents will follow.