by Kim Lund,  Broker Owner, Remax Cayman Islands

This is my insight into how I see our recovery unfolding in the Cayman Islands, as we get through the COVID-19 crisis and resulting recession.  This is based on my 35 years of experience in Grand Cayman, having been involved in the real estate industry for that whole time.  It is difficult to predict with any certainty, how our economy and real estate market will look when we get to the other side of this COVID-19 crisis and recession.  However, there have been some recent indicators that have provided a few clues as to what our recovery could look like, post COVID-19 and what we might expect in late 2020 and beyond.
One of these clues is how our government has handled this crisis.  The impact that will ultimately have on our recovery and our global reputation, as a safe domicile for investment, tourism, and residency is immense.  How each country around the world has handled this crisis will affect the speed and success of their recovery.
In our case, the Cayman Islands government has taken an aggressive stance to dealing with COVID-19.  Very early in this mounting crisis, our government made some difficult decisions.  They chose to protect our residents, despite the high economic cost.  By doing so, a potential swarm of external infections were cut off from coming onto our shores. 
Airlines and cruise ships bringing many thousands of visitors every day were stopped from coming here.  This was done before some countries even knew they had a serious COVID-19 problem. We completely isolated ourselves from the outside world, before this became a much bigger problem.
Many other proactive measures were also taken.  Soft and hard curfews were put in effect, only essential services were allowed to be open, strict quarantine rules were put in place, approximately 160,000 test kits were flown in (our population is about 67,000), and daily press briefings provided complete transparency.  In a short period of time, we could potentially be completely virus free.
Our country’s reputation has received some good attention recently.  Press reports about the Cayman Islands have been very positive.  There have been stories about people flying to Cayman to escape the virus outbreak in their country and shelter in safety here, prior to our shutdown.  On March 29th, a Forbes article featured us and noted all the early measures we were taking to keep the virus out of Cayman, quarantine those few with it, and keep our people safe.
Because of these aggressive measures, we should be able to restart our economy with a COVID-19 health risk that is at or near zero, with full confidence.  Ideally, this will happen very soon.  We are still without mass contact with the outside world.  We can use this additional time to resurrect and strengthen our economy, without any fear, so we are soundly prepared by the time we open our borders.
The Cayman Islands economy was booming, as we entered this crisis.  Our government was strong and fiscally solid – how many other countries can say that?  While this pause in economic activity and global recession will have an impact on us, like it will everywhere else, in our case it should only slow us down for around 6 to 9 months.  Our strong economy has a very good potential to quickly come back.  This crisis will not be nearly as severe for us, as it could have been, due to the early measures taken and going into this financially sound. 
Many other countries have had to print money to get through this crisis.  They will also now, more than ever, need to increase taxes as soon as possible afterwards, to manage their huge fiscal deficits.  Cayman has not needed to do this and that makes us very appealing.  We continue to be a uniquely safe, tax neutral domicile for investment, without the dilution or diminished investment returns that other countries will not be able to avoid, due to the desperate need they will have for increasing taxes and other costs.
After this period of pause to our economy, not a whole lot will have changed for Cayman.  The same sought after developments and businesses that were here before COVID-19 will build right back up, again – they have not completely stopped or ended.  By later this year, the same good investments will still be available, just like before, as investor’s appetites for quality real estate holdings begin to resurface. 
Everyone still needs to make money and get good returns, so as demand comes back - which it will as nothing here has really changed – rental income and capital appreciation will continue to steadily increase, as it did before.  The next 5 to 10 years for the Cayman Islands still look incredible.  For us, it only gets better and this crisis makes us realize and appreciate what a very special place we have, more than ever.  Many others around the world were starting to realize this, as well, and in record numbers.
There is little doubt that our tourism will come back quickly because we are a very safe destination and that has a lot more meaning, now.  All the same features that attracted our record tourism previously, year after year, are still here with more to come.  As our ongoing development and infrastructure improvements continue, we become a better place to visit and reside, every year.
Our population was increasing rapidly before COVID-19.  This surge will steadily come back, as more staff will be needed for the ramp up and expansion of construction activity and new businesses opening.  This will be the same as what was happening before the crisis. 
Economic activity and development will pick up, since nothing really has changed here.  In 2021, we should see an unprecedented increase in population, to support all the existing development that will have restarted and to staff the new ones that will be completing.  This would have happened this year, if not for the crisis and recession.
Prior to the crisis, our real estate inventory of existing properties was very low.  Residential properties were extremely limited in supply, other than at the highest end of the price range.  Condominiums on Seven Mile Beach were virtually sold out, with few exceptions.  Even rental properties were exceptionally hard to find anywhere within a 10 mile radius of George Town and Seven Mile Beach.  And to top this off, we were expecting a record year for population growth in 2020.
Because of record tourism and a rapidly increasing population, many existing properties were sold and others were taken off the market to realize strong rental income returns.  With the ensuing global recession, we will very likely see more inventory coming onto the market for sale in the short term.  There were also a small percentage of sales lost, as some Purchasers walked away from closing, fearing the unknown impact of COVID-19. 
This inventory should be short lived, as these properties will be available in a very depleted market of existing properties for sale and likely at attractive prices to sell quickly.  By the middle of 2021, it would be surprising to see many, if any, of these properties still on the market.
The prior shortage of available properties supported demand for a lot of new development.  Pre-construction developments completing over the next 1 to 3 years were selling very well, as demand remained strong and outpaced the existing supply of residential, vacation, and investment property. 
Sales activity for the real estate market should start back slowly by this summer and then build up to pre-COVID-19 levels by late in the year to early 2021.  Likely, many Developers will provide some initial incentives to bring back the strong buying activity that was prevalent in early 2020.  Government may also offer some short term incentives to help speed up the initial pace of investment activity and our economic recovery.
In summary, the world still has some difficult months ahead with the health issue from COVID-19 and the resulting recession.  For the Cayman Islands, we have a strong determination to take whatever steps are necessary to rid ourselves of this virus and work hard to build our economy back up to its previous level.  Fortunately for us, our recovery is starting from a foundation of a very strong economic base.  
In terms of safety, both for your health and investments, it will be very hard to find a better place than the Cayman Islands, as we go forward post COVID-19. I sincerely hope you and your family stay safe and healthy!