That's a question we were asked recently. Our answer? It depends.
Here's the way we see it -- the Jamaican real estate market boomed between 2005 and 2007, for various reasons, including "easy" income from alternative investment schemes, alongside relatively low mortgage rates. Mortgage rates have since inched upwards, and the alternative investment schemes have crashed. This means no excess income, and when combined with the effects of the global recession, there is also some amount of uncertainty. So the sellers in todays market are doing so for a number of reasons - including liquidating assets in order to hold cash, downsizing to reduce living expenses, and normal real estate sale activity. Are there bargains? In the J$15m - $25m segment, yes it certainly seems so. Are prices generally trending downwards? There have been some reductions, but generally speaking, it may be too early to tell.
We think potential buyers would do well to keep their eyes on the market, in order to be able to recognize a bargain when presented with one, and be ready to move on it!
The Jamaica Gleaner published an article alluding to the reduction in real estate property value in Jamaica that could result from the crash of alternative investment schemes like Olint and Cash Plus. The article states that there is 57% decline in the number of development approvals processed by the Jamaica Real Estate Board, and industry experts weigh in to confirm the fact that there will be an impending negative effect on the industry.
Based on the fact that we have already been advised of a 71% increase in non-performing mortgage loans in Jamaica, we think it's just a matter of time before we see some fallout. If you have property that you must sell in this market which is already showing showing signs of a decline, here are some tips to improve the value of your real estate.
We must also mention a few other housing developments of interest in todays real estate market. Firstly, The Villagio in Montego Bay is due to be completed in January 2009 and features condominiums and townhouses and prices start at US$350,000. The ad says they are 80% sold out. Also in Montego Bay, The Colony at Half Moon and The Palmyra are offerings which seem to be pitched to overseas investors.
Seymour West is to be located in Kingston's Golden Triangle, and is slated to be a community of 2 bedroom apartments and 3 bedroom townvillas being offered by Sagicor Property Services. Prices start at US$345,000.00.
We will be watching the uptake of these properties in the months to come.
The combination of high oil and commodity prices along with the fallout of local alternative investment schemes should translate to fall in housing demand of about 10 per cent. That is the projection of Valerie Levy of Valery Levy and Associates, who says realtors should anticipate slower growth
in the housing market in 2008. Most unregulated financial organisations (including the popular Cash Plus, Olint, LewFam and Worldwise) have been server cesae and desist orders by the FSC and have suspended payments to their
members for some time now.
Richmond Development Company Limited will build 1,002 housing units in two phases, mainly targeting a market of returning residents, with the first 500 units expected to be completed in 12 to 16 months. The three bedroom stand-alone units are priced at US$195,000 (J$13.6 million), and at this price these units should be a great investment.
PropertyAdsJa.com is a brand new website which brings together persons advertising and persons seeking property in Jamaica in a highly effective manner, and best of all it's free for everyone to use, including real estate agents! Property advertisers create and manage their own listings and property hunters search through available properties using a simple search interface to return the listings most relevant to them.
We recognize that persons searching for real estate on the internet do so because they want to see pictures of the properties being advertised, and so all listings must have at least one picture in order to appear in search results. Advertisers also get a short website address for their property that they can use with the newspaper classified ad for increased visibility of their listing.
All persons advertising real estate in Jamaica should take advantage of this opportunity to get their properties seen, 24 hours a day, from any where in the world!