Jamaica
News - Real Estate - Sales
(February 6, 2005)
Current market trends in the real estate industry
IN THE last quarter of 2004, demand
for housing was strong and supply was scarce; thus we began to see
a rise in housing prices across the board. As we move into 2005,
demand for property remains strong thereby creating a 'Sellers
Market'.
THE RESIDENTIAL MARKET
Resales are attracting multiple offers and new developments are
being booked out before construction begins. Due to the strong
demand and the lack of existing inventory, prices are increasing
and my prediction is that this trend will be sustained well into
2005.
Purchasers recognise this and are
committed to buy as soon as they are introduced to a property that
meets their needs.
Listed below are some examples
showing the appreciation in recent years:
New developments in these areas are
now on the market and are priced from $16 to $27 million depending
on the location of the development, size and design of the unit,
and amenities offered.
However, properties for sale
within a range of $6 million to $8 million are in most demand and
are attracting multiple offers. And the main reason that
developers are not building $6-$8 million homes is that in
Kingston and St. Andrew, we are running out of land that is easily
developed; that is, flat land with infrastructure already in place
or close by.
Due to the shortage of land, prices
have escalated and so because developers are paying more for land,
the prices of units are escalating. We also have to take into
account the density requirements in any given area. The higher the
density allowed the more feasible the project is to a developer.
As a matter of fact, Stony Hill and Red Hills are looking very
attractive now, as there is more available land in those areas.
THE RENTAL MARKET
The rental market remains buoyant and residential property rentals
ranging from US$1,600 to US$2,200 in the townhouse and apartment
segment are the most sought after. Investors should keep this in
mind!
The U.S. Embassy move will impact
somewhat but not enough to cause a retreat in that segment as they
represent a small segment of the rental market. There are many
other embassies, corporations, communication companies and the
demand for rental increased significantly with the Highway 2000
project.
The greater demand for the local market is another kettle of fish
as the rental most in demand in that arena ranges from $40,000 to
$90,000. Properties in this range are really hard to find.
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