A completely reasonable and fair assumption dictates that during an unusually slow summer season, closed borders, zero tourists, and a reduced population count all resulting from a world pandemic we should expect ZERO sales right!? Well, when a market moves against all expectations it’s worth looking a little closer.
We have reviewed the Association movements between June and July 2020 (the new dawn) how it differed from July last year (the old world) and finally we also reviewed what we are seeing in August so far and what the latter part of the year will look like.
June 2020 Vs July 2020
40% up in Condo sales
150% up in House sales
25% down Land sales - but watch out got lots of August activity.
No change in commercial sales
July 2019 (old world) Vs July 2020 (the new dawn)
52% down in Condo sales
44% down in House sales
65% down in Land sales
66% down in Commercial sales
Property Cayman had 9 transaction sides in July 2019 Vs 4 in July 2020 - 44% decline. However that’s 4 more than we were expecting.
Observation: This decrease is expected however it isn’t what you could have expected with a pandemic underway. Also note it’s only a temporary shift. Despite internal and external pressures, transactions and demand are still very clear and present. This level of activity is returning with gusto which is a direct testament to local confidence. Many are seeing the opportunity to lock in (with the help of pension withdrawals in many cases) a new home or long term investment before the borders open and population with demand increases again.
With a steady incline of new listings, new contracts and a decline of the Back on Market listings, the August/Sept/Oct pipelines are filling up nicely.
August 2019 (old world) Vs August 2020 (new dawn)
24 Condo sales last August and 8 sales so far this August10 House sales last August and 1 sale so far this August32 Land sales last August and 3 sales so far this August0 Commercial sales last August and none this August... so far
Property Cayman had 10 transaction sides in August 2019 Vs 14 lined up to close this August 2020 (pipeline contracts) - 40% up and we have 3 weeks to go! Watch this space.
Observation: Another summer season with record number of transactions? Despite a reduced July (year on year) there’s a surge of activity to rebuild the pre-covid momentum. It says a lot. Local demand and confidence is holding its ground and we can expect some good catch up this month.
August and beyond
With borders closed and pension withdrawals slowing down in the latter months of the year we can expect to see a decline in properties going to contract and a consequential increase in inventory (lowered demand with increased supply). We feel however that things won’t slow down and that when borders open up we can safely forecast new and positive influences on the market.
With open borders the market will quickly absorb any oversupply of inventory. With extended border closure into November we can expect pricing pressures to take effect but in reality it will be more of a stabilizing effect than a significant decrease in pricing.
Either way, whilst numbers are averaged down by 50%, most sectors of the market won’t see any significant decreases in pricing as seller’s continue to be patient. Markets ebb and flow over time so be sure to establish your big-picture property plan and consider the different chapters of YOUR journey. If you wait for a market to change to your advantage you will miss out on the opportunities currently in front of you.
This analysis is broad and general and more designed to spark the conversation. We would be delighted, as always, to assist you along your personalized property journey so feel free to reach out and let us know your thoughts, ideas and even concerns. We can cut through the noise and give confidence to your next move which every direction that might take you.
NB: ref: CIREBA stats
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