There’s an old adage from Will Rogers the actor and writer; Don’t wait to buy real estate. Buy real estate and wait. But does that ring true in this new age of Novel Coronavirus 19 Pandemic?
While many people ponder this during this ever-changing phase in the markets. One thing is certain – there is much uncertainty in how the real estate markets will fair through this. Some industry commentators suggest a dip in property prices and a slower turnover of sales. Many real estate professionals are confident that demand for high-quality product remains strong and, in fact in some sectors of the market, demand is increasing. These trends will vary by location and buyer/seller demographics, including in the Caribbean region.
In the British Overseas Territory of the Cayman Islands, some of the islands real estate brokers are reporting that local and international demand remains solid, including demand from offshore buyers seeking to acquire recreational properties in lower-density areas and to establish permanent residency. Based on that market feedback, here are five reasons why buying a second home in Cayman right now could be a wise move:
CONFIDENCE: ‘Unprecedented times’ is the new adage during this pandemic era. With new data available daily, economists are constantly re-modelling likely outcomes with regards to GDP impact, unemployment and eventual recovery. However, with the absence of even a close comparable historic model for a nation, let alone globally on which to base reliable forecast models makes that a virtually impossible exercise. It is worth noting however the Cayman Islands ranks seventh in the world with a budget surplus equal to 4.4 per cent of its GDP.
What is not difficult to forecast is that confidence in Cayman will stay strong from Caymanians and those who have already relocated to and invested in, work and live here. The qualities of the Cayman Islands world-class infrastructure and leading financial services industry, sound Government and regulatory environments, and the benefits a tax neutral jurisdiction for individuals and corporations, are not lost especially over the long term. The population of aproximately 67,000 is roughly divided 50/50 between Caymanian status holders and expatriate workers and their families, plus wealthy retirees.
LOW INTEREST RATES: Borrowing right now is affordable. Opening the window of opportunity for a higher rate of return, should the property be sold when the market demand drives prices higher.
LESS RISK & LOWER VOLATILITY: The stock market has typically had higher levels of volatility than Cayman’s property market. For investment-motivated purchasers seeking to reduce risk in their overall financial portfolio, real estate investment in a socio-economically stable, highly liveable, well-regulated and tax-neutral jurisdiction such as the Cayman Islands may prove to be a wiser long-term strategy.
LIQUIDITY: Moving some investments out of the markets to a cash position, many investors foresaw a 2020/21 recession, although it’s unlikely due to Coronavirus! For those individuals and entities with available liquid assets, Cayman may present a safe and stable jurisdiction in which to invest those funds in real estate here, whilst waiting for the stock markets to stabilise.
CAYMAN RESIDENCY: Cayman has proven itself to be attractive and advantageous to globally mobile, affluent families are seeking second home location such as the Cayman Islands to secure permanent residency via investment in developed real estate. Pandemic or not, there are no indicators to the contrary and Cayman real estate purchases in the US$1.2 m range will continue to command market interest.
Those with long-term or patient capital know this is the time to remain invested in jurisdictions such as Cayman and to seek out opportunities now before markets bounce back, with tourists and real estate investors returning to continue the upward gradient in Cayman’s property prices.
If you are considering relocating, or a second home investment please don't hesitate to contact us at Milestone Properties Cayman.