Jamaica
News - Real Estate - Sales
Source: The Jamaica Observer, Dennise Williams, March 25, 2007
Real
estate market remains buoyant
The shortage of
affordable housing in desirable locations has forced buyers to dig
deeper in their pockets to acquire property. "Jamaica is
still experiencing a seller's market," explained one of
Jamaica's leading real estate brokers, Valerie Levy.
Speaking at a
meeting of the Rotary Club of New Kingston held at the Pegasus
Hotel on Friday, Levy gave an overview of the current real estate
market.
"Prices are
going up in Jamaica, especially in the Kingston and St Andrew
communities. We are running out of flat land. Yes, we have hills
but the cost to develop them is high. This has caused developers
to pay prime money for land."
Another
contributor to the land shortage in Kingston and St Andrew is the
high cost of transferring property. "I have many middle-aged
and retired clients who want to sell their property to downsize
and have a little cash left over.
However, when we
look at the net gain after paying the 20 per cent transaction
cost, it doesn't make sense. I tell them to stay put. We are
saying to the government, if you would lower the transaction cost
the real estate market would become even more vibrant." Levy
noted that a part of the 20 per cent cost was the transfer tax of
7.5 per cent and compared that to the 1.5 per cent transfer tax
that is charged in Canada. Those who do decide to sell are asking
top dollar to compensate for the high transfer costs.
"Right now
we are seeing prices of US$1 million per acre for land in Cherry
Gardens and Norbrook," Levy explained. Even so, buyers are
not putting their money just anywhere. Levy states, "For the
price that they have to pay, purchasers are not just looking at
location. They are examining finishes and the floor plan."
Nevertheless, Levy notes that, "Jamaica is still one of the
less expensive Caribbean destinations compared to Turks &
Caicos, Antigua, Trinidad & Tobago and Barbados."
The most acute
shortage in the real estate market, according to Levy is, "in
the $5 million to $10 million range. And townhomes in the $15
million to $25 million price range are being sold off fast and it
is very difficult to find properties for qualified buyers. It is
like a needle in the haystack."
Looking at
specifics in the market, Levy noted that, "The rental market
remains buoyant in townhouses and apartments because of the
security features. Therefore, it is still a good time to buy. The
rental market in Jamaica earns you more than what you would get in
the US. And in some cases, with the rent, you can get a 10 per
cent return on your investment."
While the Kingston
6 and 8 areas are in great demand, Levy notes that, "People
love Havendale, Smoky Vale and Constant Spring Gardens. It is very
difficult to find homes in those areas." However, the most
desired and most expensive area in St. Andrew is Billy Dunn.
"Sellers in Billy Dunn are getting whatever price they ask
for.
The reason why
this is so is because no townhomes or apartments are allowed.
These lots which are between 3/4 acre to one acre are for estate
type living." Another hot area in St. Andrew is the Seymour
lands. However, Levy notes that this community is suffering from
overbuilding. "When sewage was brought in the density
increase and unethical developers who were approved for one
bedrooms put in 2 and 3 bedroom units." Beyond St. Andrew,
Levy points to Portmore as being on the move.
"All the
developments in Portmore have sold. And properties that used to be
$3 million are now $5 million to $6 million." In the
communities of May Pen and Mandeville, Levy notes, "Prices
are moving up but in May Pen there is not a great demand.
In Mandeville,
there is a risk of overbuilding. However, people are beginning to
commute between Mandeville and Kingston." Levy also notes
that the plains of Spanish Town is a community that is poised to
grow once crime is under control. In fact she states, "If we
clean up crime and people feel secure, the areas near the highway
are just waiting to be developed."
For those who might
be discouraged by the pace of price appreciation, Levy offers two
points. "If you can't afford a house, buy land. The land will
appreciate while you secure financing to build." And in terms
of financing, Levy notes, "What is good is that mortgage
interest rates have come down and the mortgage companies are
getting aggressive and working with clients."
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