A weekend topic starting with Cayman Compass. "More than a year ago, during the midst of a coronavirus lockdown, hardly anyone predicted that property prices in Cayman would continue to rise. For the construction and real estate industry, forecasts turned out to be entirely incorrect. In fact, construction has been the main driver of the economy in 2020. New development projects are announced almost every week."

"The projections for the rental market were nonetheless accurate, after initially between 5,000 and 6,000 people left the islands. Rents declined by approximately 10-15% last year, said Lou Dimitrov, real estate economist at Dart. Intuitively, the lower demand and reduced cashflow from property investments should have deflated asset prices. Yet property prices increased."

"So, what is going on? Dimitrov explained that investment analysts separate the real estate market into the space market and the asset market. While the space market deals with physical capital in the form of actual buildings, the asset market deals with financial capital. As such, real estate is part of a broader capital market where property assets compete with stocks, bonds and other financial assets."

"Both markets are separate but connected. Rent levels, for instance, determine the demand in the asset market, because investors buy based on the income stream, in the form of rental payments, that the asset generates. But the asset market is also affected by the cap rate – the current yield investors demand to hold real estate assets. This, in turn, is impacted by interest rates and the rates of return of other assets in the economy."

"At the macroeconomic level, the most important measurable factor that led to higher property prices, Dimitrov said, was the expansionary monetary policy in the United States. Last year, the Federal Reserve increased the money stock by $4 trillion, an amount that was larger than all of the money that was in circulation in most of the 1990s."

"This money, made available through credit, was largely used to buy assets and inflated prices everywhere, from stock markets to property markets."

"Decreasing interest rates, in combination with more available money, have also changed the equation for property buyers who use debt financing. Purchasers can buy more expensive properties and get more financing for the same regular debt repayments. And investors can buy pricier assets and still receive the required capital return."

"Fleur Peck of Blue Point Consultants said that the 'number one' factor for increased activity in the property market was lower interest rates. 'Suddenly people have realised that they can afford a property, whereas two years ago they could not,' she noted."

"International investors have also changed their priorities and lifestyle preferences because of the pandemic, said RE/MAX broker/owner James Bovell. Some even decided to buy in Cayman without ever visiting the property. Because large multi-million-dollar property investments have the added residency incentives, luxury market sales have more than tripled in the past 12 months. The same attributes appeal to Cayman residents. Some already had property on island, but decided, for instance, to invest in a holiday home locally rather than abroad, Bovell said."

From News 5 Cleveland in Ohio. "Across the country, homes continue to sell at record speed and for record prices, as a housing inventory shortage continues. Brian Barczyk just sold his house for double what he paid for when he first moved in back in 1998. 'Very few houses in Brunswick sell for over $400,000; now it’s happening left and right,' he said. 'We had a line out the door at 7:30 in the morning for the open house. We ended up receiving 14 offers, 9 of which were 20-30% over the asking price.'"

"'Where we live has always been an affordable market to live in,' Sam LoFaso, a Realtor in Northeast Ohio explained. 'What we’re seeing is we’re starting to catch up with areas like Illinois, Indiana and Pittsburgh.' An American dream for any homeowner looking to sell."

The Estes Park Trail Gazette in Colorado. "While the supply side new inventory held its own in May, the prolonged lack of inventory overall, coupled with extreme competition among buyers, continued through the month and pushed over-asking price contract offers to new highs. 'While new listings have remained stable in comparison to 2020, the real culprit is the demand of buyers ready to pounce when a new property comes to market,' said Glenwood Springs-area REALTOR® Erin Bassett."

"'Are we all just getting used to the ‘new normal?’ asks Boulder/Broomfield area REALTOR® Kelly Moye. 'We aren’t using words like ‘unprecedented’ or ‘insane’ to describe our market anymore. The scramble for buyers to find a home and the prices they are willing to pay for them, are becoming the norm. The public is used to listings selling in 3 days for 10%-15% over list price and almost all conditions in the purchase contracts are now waived.'"

"In Fort Collins, REALTOR® Chris Hardy said, '…Fort Collins saw its highest median price on record spike 20% in May to $533,718. In spite of all the reporting of low active inventory numbers, the Fort Collins market is selling more homes each month than in each of the past two years. Nearly every home that comes on the market is sold in the same month and there isn’t much left to choose from. As I heard one mortgage lender say the other day, ‘We don’t have a supply problem, we have a demand problem.’"

The Edge Malaysia. "Lightening its debt load is not a priority for Eastern & Oriental Bhd (E&O), according to executive chairman Datuk Tee Eng Ho. 'I am comfortable with the debt level. I don’t think it is right to keep thinking of reducing the debt, as it will end up [with us] doing nothing with no new launches. You can borrow, but make sure you have sales and launches,' he stresses. Tee says there is no plan to raise funds for E&O at the moment. 'Borrowings are cheaper as the banks can give us a good rate.'"

"E&O is scheduled to launch its maiden development for the STP 2A project in 1Q2022. The company plans to build two blocks of 35-storey serviced apartments with a gross development value of over RM700 million. Early this month, Kerjaya Prospek Group Bhd (KPG) accepted a letter of award worth RM28.4 million from E&O to undertake the foundation work for the property project."

"Overall, he is of the view that the property market may start to recover by the end of this year. 'The world is printing too much money and inflation will come back. So, we will see property prices shooting up.' But specifically for Iskandar Malaysia, Tee thinks the development will be very slow there due to the oversupply. 'It is not easy for property prices in Iskandar Malaysia to go back to the levels seen three years ago.'"

From Channel News Asia on Malaysia. "The Johor skyline is now dotted with empty condominium units, due to an oversupply in the market and lack of foreign buyers. When Singapore business owner Jonathan Gan purchased a 4-room condominium at Lovell Country Garden in 2018, he thought he had clinched his dream retirement home. The freehold apartment located near Johor Bahru’s city centre was twice the size of his 3-room HDB flat in Singapore, but the cost was only half of the latter when he bought it directly from the developers."

"'The best thing about the unit is the amazing view. You never get anything close to it at such value in Singapore,' added the 42-year-old, who lives with his wife and two daughters. 'It was the ideal weekend home,' said Gan. 'But now it’s becoming a bugbear.'"

"Just three years after he purchased it, Gan who bought the unit at around RM1 million (US$242,000) is having a hard time trying to sell it, even though the asking price is a fraction of what he paid for it. Furthermore, Gan’s business in Singapore has been affected by the pandemic, and he now needs to sell the apartment to gain some liquidity."

"'All this was never part of the plan. But the house is just left there, collecting dust and its value is going down by the day. We felt it is better to cut our losses and try to get rid of it,' he told CNA. Despite being on the market for over a year, there have been no takers. He has engaged agents and even advertised the unit on various property portals but to no avail. 'There is not much hope. Barely anyone has viewed or signalled interest,' he said."

"Gan is among property owners in Johor Bahru who are having issues trying to sell their properties, as the market is in the doldrums due to the prolonged effects of COVID-19. Condominium developments around Johor Bahru were built with foreign buyers in mind, but the pandemic has closed borders, leaving many of them empty. Units owned by those from China, Singapore, Hong Kong have been left unoccupied while homes that were left unsold have stayed empty. Landed property is also facing potential depreciation."

"Property analyst Debbie Choy, who is director of Knight Frank Malaysia’s Johor branch, said the situation is particularly bad for condominiums and serviced apartments, of which there is an oversupply in the Iskandar region. 'Many developments were targeting a large proportion of overseas buyers. With the prolonged effects of COVID-19 restricting movements, it has been challenging for developers or investors to offload either for sale or rent,' said Choy."

"A Singaporean who wanted to be known only as Mustaqim, who owns a 2-storey 4,000 sq ft terrace home at gated community Horizon Hills, has expressed concern that the value of his house is depreciating since he purchased it in July 2017. 'With COVID-19, some of my neighbours who are Singaporeans have decided to sell their homes for RM1.1 million to RM1.2 million. It is spoiling the market a bit but I can understand why with the borders closed,' said Mustaqim. 'I am concerned that this downward trend will continue and my home’s value will be going lower and lower. I would be owning a depreciating asset,' he added."

"Property agents in Johor have also seen their livelihoods hit with the lower volume and value of transactions during COVID-19. An agent who wanted to be quoted only as Brian, told CNA that he has been forced to take a second mortgage on his own home as the number of transactions has dried up since the pandemic. 'Some months I barely make any transactions, so I’ve been looking around for another job to tide through over the next few months,' he said."

"The agent, who specialises in selling condominiums in the central Johor Bahru area, said that most developments have the same problem – too many units on sale with 'almost zero' demand. 'Some months, we have to live with zero completed transactions. So, the situation is really bad for us,' added Brian."

"The situation seems especially bleak for those desperate to sell their homes like Gan, who cannot find a buyer despite lowering his asking price for his 4-room apartment at Lovell Country Garden. 'It’s a sticky situation. Although we had good times using it as a weekend home, ultimately buying it was a wrong decision we now regret,' he said."