By Dennise Williams, Staff Reporter
If you are really serious about buying a house, don't take long to make decisions as properties are moving fast. – File
IF YOU are in the market to buy a house, be advised that is not only the stock market that is experiencing upward momentum.
Currently, the real estate market in Jamaica is in a time of rising prices, especially in the Corporate Area.
Speaking to real estate experts at CD Alexander and Century 21 Heave Ho Properties, Sunday Business was informed that bargains in the market are few and far between.
Gina Harrison, general manager of Century 21, states that, "It is definitely a seller's market."
Veteran real estate salesman, Alton Thompson of CD Alexander gave some examples of the current state of the market.
"The rising prices are mostly reflected in newer developments although older properties are benefiting from corresponding rise. Just a few years ago, I sold a Portmore quad for $1.2 million. But, as of last year, those units are now are on the market for $1.7 million. Three years ago, I sold a client a six-bedroom house in the Stony Hill area for a price in the region of $8 million and she recently told me that she had the property valued and is now worth $14 million."
CAUSE OF RISING PRICES
But why are prices rising, especially in the Corporate Area?
According to Mr. Thompson, "Real estate prices are rising because they were depressed for too long. Remember that with the crash of the financial sector (in the 1990s), there were too many houses on the market. The banks had a lot of houses selling but that is not the case any more.
"Remember, too, at the time, there wasn't much construction going on in the mid-90s. Now construction is taking place, but meaningful construction is just starting back. So there are a lot of people chasing too few houses.
"Additionally, you have to consider the massive devaluation that took place last year. It also caused prices to go up."
But the real culprit behind rising prices is the lack of available land space, explains Mr. Thompson.
"We are running out land space in Kingston. The stage that we have reached is that developers are knocking down existing houses to create town houses and apartments."
PEOPLE ARE STILL BUYING
And just how bad are things?
Laments Mr. Thompson, "I have a lot of clients in the five million dollar market that I can't supply. This includes houses, town houses, lots and apartments. And these people are really stretching from $4 million (the price range that they can really afford). Also, the $8 million price range for houses in the Corporate Area is a demand cannot be readily filled. Also in the Kingston 6 and even homes in Cherry Gardens in the $16 million range, I just can't supply enough."
Ms. Harrison agrees that the 'hot areas' in the Kingston 6 and 8 areas are flying off the market.
"The market is very busy as there are a lot of buyers particularly in key areas of Kingston 6 and 8," she explains. "That is the area where people work, go to school and have a lot of convenience. That area of town is where it all is."
And so the current market has forced buyers to put down money before the building of properties have been completed.
States Mr. Thompson, "People are definitely buying. We can supply the clients if we get the houses. And the houses that are being built are being sold before they are even off the ground."
Ms. Harrison agrees: "In the $5 to $7 million range, it is extremely hard to fill for homes. Even existing apartments are not turning over fast enough for the demand. So people are looking at new developments."
RISK OF OVERBUILDING
But, although it is a seller's market, there is a word of caution for sellers.
No matter what the location, the market will not react favourably to overpriced houses.
"No matter how big or bashy your house is and no matter how much love you put in your house, if it is priced higher than what the market thinks that it is worth, your house will not sell," explains Ms. Harrison. "Overbuilt houses will not get a sale. There is a ceiling to what people will pay. Buyers will not spend $10 million for properties in Portmore and St. Catherine, unless that is the area that they come from. So with the mansions that are going up in St. Catherine, there is a limit to what you can ask for. For St. Catherine, $3 million is the going price, but over that is a harder sale. No matter what the house looks like it is a hard sell to get $4 million in Greater Portmore."
