17 Sep 2020
Conventional wisdom suggested that the COVID-19 pandemic would negatively impact the housing market, leading to a buyer's market.
Conventional wisdom was wrong, at least as of right now.
With demand high, inventory low and mortgage rates at unprecedented low levels, countries around the world are seeing a boom in housing sales. Even in the United States, which has been heavily impacted by COVID-19, there has been a significant increase in home-buying activity over the summer. According to statistics provided by the U.S. National Association of Realtors, July saw the second consecutive month that year-over-year sales and median home prices grew in each of the four major regions of the country. Sales were up more than 30% in the Northeast and West and the median home price was up from 4% in the Northeast to 11.3% in the West. The association also reported that in the second quarter of 2020, 96% of U.S. metro areas showed home price appreciation, with 15 of those cities seeing double-digit growth.
The real estate market in the Cayman Islands is experiencing a similar increase in home sales since the second quarter of 2020 began. According to statistics provided by the Cayman Islands Real Estate Brokers Association, between 1 April and 7 August, US$98.1 million in housing sales closed, including 56 condominiums, 21 single-family homes and one semi-detached home. In addition, there has been US$37 million in sales for undeveloped land in the Cayman Islands.
Dart Vice President Real Estate Marketing and Sales Sue Nickason said the sales activity in the Cayman Islands is particularly impressive considering the country's borders have remained closed to tourists since mid-March.
“Given the constraints to the sales process, which is normally conducted face-to-face, as well as ongoing economic uncertainty, the continued pace of sales in the Cayman Islands has been quite positive,” she said. “Low interest rates, continued availability of financing from local banks and confidence in the solid footing on which the Cayman Islands economy is based, have all been factors contributing to the ongoing market performance.”
Nickason said that the Provenance Properties Cayman Islands team has also experienced an increase in inquiries from high-net-worth individuals seeking to acquire properties in order to apply for residency by investment through real estate, and as vacation homes.
“Globally mobile high-net-worth individuals are understandably nervous about social and economic conditions," she said. "We have a growing list of clients who are witnessing how well Cayman has performed during the pandemic. They are now seeking to establish a presence in Cayman and based on the feedback we are receiving, we expect this trend to continue for the rest of 2020."
In the month between mid-July and mid-August, Provenance Properties conveyed nearly CI$10 million of properties and number of other properties under negotiation that were expected to close in the near future, Nickason said.
It’s not just property buyers that are keeping the Cayman Islands realtors busy; long-term rental inquiries are also brisk.
Provenance Properties Sales Associate Shanice Ebanks, who also specialises in assisting clients in locating rental properties, said she is seeing increased interest from people abroad looking to spend time in the Cayman Islands as a safe refuge.
“It was exciting to hear that the Cayman Islands Government is considering the introduction of a Global Citizen Program,” she said, referring to a proposed amendment to the Immigration Law that would allow prolonged visits to foreign business executives, entrepreneurs and students who can work remotely. "I am replying to inquiries about this opportunity, as well as assisting people who are relocating to Cayman for work."
Although the long-term rental market in the Cayman Islands has been adversely impacted by the COVID-19 pandemic due to the contraction of the population resulting from hospitality workers leaving the islands, Ebanks says there is a silver lining in the situation.
"Some overseas employers want their employees to work from home right now and many are considering at least a temporary home in the Cayman Islands," she said. "They are very impressed by how our government has managed the situation and they find the lifestyle here really appealing.”
Developers are bullish on the real estate market, as well. During the annual Cayman Islands Chamber of Commerce Economic Forum on 14 August, Minister of Commerce, Planning and Infrastructure Joey Hew said development applications continued to pour into the Cayman Islands Department of Planning since the COVID-19 pandemic started.
“Over the lockdown period, the Department processed thousands of applications, approving projects valued nearly CI$150 million and granting permits valued close to $200 million," he said.
This article was originally published in the September 2020 print edition of Camana Bay Times with the headline "Cayman housing market remains strong."
About the author
Alan Markoff has worked with Dart as the editor for Camana Bay Times for three years and has been writing professionally since 1997. Born and raised in Cleveland, Ohio, Alan graduated from the State University of New York at Albany with a degree in English, and first moved to the Cayman Islands in 1982. He has 16 years of experience in the real estate industry and previously worked as a journalist for Cayman Compass before joining Dart to relaunch the Camana Bay Times monthly newspaper. An avid baseball fan, Alan loves travelling but also schedules trips back home around catching a summer game or two with his home team, Cleveland Indians.