ARE THERE DEALS?
The decision regarding whether to buy or sell is impacted by two main components:
1) The individual’s personal situation and needs
2) National and international market conditions
1. An individual’s personal situation and needs may include but are not limited to the following:
- Job security
- Value of Reserves
- Specific housing or investment needs
- Level of uncertainty in relation to current and future revenue streams
- PURCHASER'S MINDSET
- Level of indebtedness
- Level of reserves
- Value of the property to overall wealth or earning capacity
- Profitability of the transaction
- VENDOR'S MINDSET
The mindset of both the vendor and purchaser will be determined by each individual’s situation as this can be different and their perception of the situation varied, resulting in wide range of responses. The current facts and historical data can help us better understand and respond to the many decisions required at this time.
2. As it relates to national or local markets the things being considered currently are:
- How have the authorities adequately managed the health crisis
- How soon will everyone be back to work
- How has the market been affected by the activities in the international markets such as the US, UK and Canada
The crisis has been well managed by the authorities thus far with 23 cases, 0 deaths and 0 active cases. Additionally, testing has been ongoing and they have completed over 5,000 tests.Many businesses remained closed in excess of 2 months; this negatively affected the earnings of most market participants if not all.The Tourism, Education, Construction and Entertainment sectors were severely impacted. Additionally, all related businesses large and small made adjustments to staffing, spending and general operations.
Grenada is now primarily open for business, though many businesses have lost significant revenue and have adjusted projections downward.The biggest unknown currently is how the local market will be affected by the current and future situation in the UK and North American markets that contribute to the economy.
The questions right now are focused on how deep and how long will the negative effects of COVID-19 in the international markets will be on the local economy.What we know is that there will be a lag in the affect. Historically, this could be as long as 24 months to experience the full effects.
What we know is that it is not expected for prices to trend upward in the short to medium term.If decisions are required with regards to buying and selling real estate in Grenada the decision will rely heavily on the individual circumstances of each market participant.
ARE THERE DEALS?
There will always be deals based on a Vendor's circumstances regardless of what's happening in a market but any expectations of widespread reductions will be delayed as we have seen in the past and will depend on the extent and the length of time any recession results from the current situation. The proactive measures (moratoriums etc.) taken by the local financial institutions will serve to further extend the lag, as they have catered to fact that the mortgagee will have an inability to service the debt for a period of time beyond their control.
Consequently, to maximize on any real estate investment whether you are purchasing a small piece of land or you are a multi-million dollar investor, align yourself with a knowledgeable real estate agent, asses your individual situation and determine your financial ability to complete the transaction.
Author: Leila Maria La Touche