Jamaica
News - Real Estate - Sales
(July 9,
2004)
Property
market on fire
LAND VALUES in Jamaica, on average,
have risen by over 20 per cent since 2003.
The driving force of the price
increases are increased demand, an improving economy and dissatisfaction
with current money market interest rates.
"Prices over the last year have
risen as much as 25 per cent for land in desirable areas," Connel
Steer, partner of Allison Pitter & Co. explained. "What I mean
by 'desirable' is land with no squatters or ghetto nearby. In my
opinion, what has fueled the demand for land is the drop in interest
rates for Government paper. When interest rates dropped from 34 per cent
to 15 per cent, money needed somewhere to go to get a good return. And
so real estate prices have spiked."
Deborah Cummings, managing director of
Century21 Heave Ho Properties expanded on this. "Prices
are going up because availability of land is limited, mortgage companies
are lending more money, the meltdown in the financial sector has
stabilized and the economy is growing."
And just what sort of price movement are
realtors speaking of? Well, depending on the location and use of land,
the price movement is significant.
DEVELOPMENT LOTS
Andrew Issa, managing director of Coldwell Banker Jamaica Realty states,
"Last year, a one acre development lot in the Cherry Gardens/Jacks
Hill area was selling for $15 million. This year it sells for $25
million."
Alton Thompson of C.D. Alexander Realty
agrees. He said, "persons selling lots in say, Norbrook or Cherry
Gardens are targeting developers and so one acre lots can go for $20 -30
million."
Mrs. Cummings states that more and
more persons are coming into the market as developers to capitalise on
the demand for gated communities. "One townhouse in the Norbrook or
Jacks Hill area can go for $18 to $25 million. So for a nice flat piece
of land, developers are willing to pay."
CORPORATE AREA RESIDENTIAL LOTS|
But those persons wishing to build their
dream house will have to dig deeper into their pockets. Mr. Issa states,
"To be honest, single home residential lots are mostly up in the
hills. Gently sloping lots with a view can be found in the Norbrook
Heights, Belvedere and Red Hills areas. It will cost about $2.5 to $4
million for an one third to one half acre lot."
Mr. Thompson said, "For the
Smokey Vale, Stony Hill and Chancery Hall areas, the average price now
is $2 million. Last year, there were more lots and so the prices were a
few hundred thousand less."
But the most expensive residential lots
can be found in the ultra exclusive enclave of Billy Dunn, a
neighborhood off Barbican Road. Explains Mr. Steer, "A half acre
lot in Billy Dunn costs anywhere from $8 to 12 million. Why? That
neighborhood has everything lovely views of the city and the sea, it
is very close to everything and there are no social problems like
squatters or nearby ghettos."
OUTSIDE THE CORPORATE AREA
Moving from St. Andrew, realtors state that in the North Coast area,
stretching from Boscobel to Negril, prices have also appreciated
significantly.
Explains Mr. Issa, "Montego Bay is
definitely leading the North Coast in growth. Price appreciation over
there has been phenomenal. There is a lot of overseas interest in villas
and this, in conjunction with tourism growth, has sent up prices. A
residential lot of a half or quarter acre is now selling for $4 to $6
million. Further away from the main town of Montego Bay, residential
lots of a quarter acre sell for US$50,000 to US$70,000." |
Mr. Steer said, "It is my
understanding that quarter acre lots in Harmony Farms near Rose Hall,
Montego Bay sells for $3.5 to $4 million."
However, Mrs. Cummings said, "In
terms of the North Coast, anywhere on the beach front or with a view of
the water has seen its price increase. The greatest demand that we see
spans from Ocrabessa, St. Mary to Negril in Westmoreland."
Mr. Steer quantified his assessment,
saying, "From the coasts of St. Mary to St. Ann prices have
appreciated by 15 to 20 per cent."
Of course, with a new development on the
horizon in Trelawny, prices there have experienced an upswing. Mr. Steer
said, "Since Harmony Cove has been announced, lots in Silver Sand
in Duncans, Trelawny have gone up from US$60,000 to US$65,000. And the
lots are really selling."
However, while there has been a lot of
talk about re-development of Portland, it hasn't translated into higher
prices.
Mrs. Cummings states, "Because of
the impending development of Port Antonio sellers have been raising
their prices, but people are not yet willing to pay. There is still
opportunity to invest in Portland."
In the middle of the island, prices
are holding steady. States Mr. Steer about Mandeville, "A half acre
lot has sold for about $2 million for a few years."
Yet, there are some gray areas. Mr. Issa
opinion, "I don't like to generalise, but there is a dampening of
the demand for Negril because of beach erosion. Also in Ocho Rios, there
is a huge demand for condos but none are being built. Most foreign
investors would prefer to invest in a condo that can be rented out than
to invest in land."
COMMERICAL LOTS
Hands down, New Kingston is the hot spot for commercial lots.
Explains Mr. Issa, "Prices are
rising for land in New Kingston because available commercial rental
space is being absorbed. Once the economy starts to grow, this creates a
push for new commercial complexes to be put up. Right now there are two
commercial lots on Trafalgar Road near Lady Musgrave Road that are
around 35,000 square feet and are selling for $30 million each."
Mr. Steer said that in general,
commercial lots have seen a 10 to 12.5 per cent increase in prices.
"Lots on Trafalgar Road, Oxford
Road, Hope Road, Old Hope Road, Lady Musgrave Road, Half Way Tree Road
and Constant Spring Road now sell from $800 to $1,500 per square
feet."
But not everywhere has seen a boom in
prices or interest. Downtown Kingston, for the most part, seems to have
been forgotten.
States Mr. Issa, "Most of the
buildings we have for sale are in the retail, wholesale and dry goods
trade, but there is very little interest in those properties."
Mr. Steer said that, "As a result
of crime and violence, there is very low demand for properties in the
city. The only exceptions are lower Duke Street, lower King Street, and
sections of Port Royal Street and Harbour Street. People see it as a
hazard to be downtown after 6 p.m."
ALL IS NOT LOST
Still, at least one expert notes that compared to our Caribbean
neighbours, real estate in Jamaica is a 'steal'.
States Mrs. Cummings, "Real
estate in Jamaica is grossly undervalued compared to islands like
Barbados and the Cayman Islands. For example, in Sandy Lane in Barbados,
a beachfront single-family property runs for prices of up to US$10
million. A similar beachfront property in St. Ann, at its most expensive
is US$6 million. And you can't buy anything in Cayman."
However, if one is still seeking
bargains, Mrs. Cummings gives this advice, "There is tremendous
opportunity in the South Coast. You can still get great buys there |
