The global economy is seeing unprecedented challenges as a fallout from the COVID-19 pandemic. The real estate and construction and development industries in the Cayman Islands have often been touted collectively as the third pillar to Cayman’s economy, after the financial services and tourism industries. As an essential component of Cayman’s economic success, Cayman needs to focus on our industry to ensure it can meet and overcome the challenges the virus has presented to us.
The first question I am currently being asked is whether real estate transactions are even taking place now, given the current hard and soft curfew restrictions as we shelter in place in the Cayman Islands. The answer is yes. So far, those real estate transactions under contract with no conditions are moving through to closings with very few people walking away from their deposit. With patience and assistance from attorneys and the Land Registry department accepting electronic copies of executed transfer agreements and the recent grant by the Government to allow notaries to sign via video link, we are able to get those transactions completed.
Transactions that have agreed on a price with contracts drawn but which are pending with conditions are proving more challenging. Such transactions, which may require financing, inspections, and reports, can move forward depending on the conditions. Still, many of these conditions require the physical inspection of a property or performance of third parties. Such transactions are being extended to allow for the time when these physical inspections can take place.
Inevitably in these uncertain times, there are several deals that either have or will fall through, and as a result, properties are coming back on the market, but when looking at the market as a whole, these numbers aren’t that large. I would also add that it is too early to say what the effects are, as we have not had enough time. Things are skewed due to the restrictions brought about by the shelter in place regulations, which, as you can imagine, it is extremely hard to generate new transactions. However, I don’t anticipate that situation continuing once some of our industry’s restrictions have been lifted.
Challenge for our real estate industry
One of the biggest difficulties in getting our industry back up and running that we need to overcome as a country is that banks were not processing loans with anywhere near the speed at which they were pre-COVID-19. This is understandable as banks have less staff operating due to having to choose which staff are exempted personnel and are therefore permitted to work. Their focus was on the 3-month deferral program they introduced to help current homeowners.
In addition, the banks have started accepting valuations based on virtual tours, which is a huge benefit to helping the process move forward while still protecting people. The banks are open for business.
Next week I want to share with you why I feel Cayman is best positioned to come out well at the end of this pandemic.
And please always remember: we are #INTHISTOGETHERKY