Real estate enters 'quasi sellers market' - Inventory and sales on the rise
Howard Johnson Jr, president of the Realtors' Association of Jamaica (RAJ) says that Jamaica is now experiencing a "quasi sellers market", with one indicator being the swift sale of units.
Inventory is on the uptick, Johnson said, but so are sales.
"Developers are building to meet the demand, which oftentimes results in the units being sold off before completion. Single-family homes have seen multiple offers, which, to me, is an indication of it being a quasi sellers market," he said on Tuesday.
The real estate sector has seen an increase in residential and commercial construction activity over the last four to six years, according to the RAJ president, who adds that "boutique commercial spaces" are in demand by professionals who need less space because of the incorporation of technology into their operations.
Otherwise, the business process outsourcing sector is one of the main drivers behind demand for large operating space, he said.
The realtor, who is also broker and property manager for Johnson Benjamin & Associates Limited, said some 2,000 properties valued in the region of $30 billion were sold through the RAJ's eight-year-old multiple-listing service, or MLS, in 2017.
He said, however, that sales by some individual businesses and government land sales are not captured by MLS, so for a more complete picture of inventory sold in the real estate sector, the RAJ is collaborating with local authorities on information sharing.
The demand for "boutique" office space tends to range from 600 to 1,000 square feet, says Johnson.
"These spaces have been built, and continue to be built, due to the overwhelming demand," he said, adding that developers of commercial space are scouting out smaller land areas to supply those demands
"Rarely do we now see the demand for land being that of three-quarter acres to an acre," he said. Instead, they are constructing on lot sizes of about a quarter to one-third of an acre, with underground parking being used to supplement the design of office complexes.
"Developers have increased their creativeness by providing amenities in new forms and in non-typical zones," said Johnson.
Accordingly, he noted, inventory is up in Kensington Crescent, Lady Musgrave Road, Border Avenue, Paddington Terrace, Ardenne Road, Washington Drive, Annette Crescent, Wellington Drive, among other areas in Kingston.
Johnson credits the RAJ's MLS system with contributions to the uptick in sales, saying it serves as a tool for comparison of listings, and, therefore, proper pricing of inventory.
"Additionally, the properties are being serviced through the MLS by 900-plus members, which is a sales team larger than any single office in Jamaica. The MLS gives realtors the opportunity for a quicker turnaround time due to the fact that we all have registered buyers on the system just waiting for the right property at the right price and at the click of a button," the RAJ president said.
He said that the market segment with the fastest sales varies, depending on location in Jamaica, but that the increased mortgage financing benefits from state agency National Housing Trust and the slight reduction in interest rates for home buyers has resulted in more offers from joint purchasers for residential properties of over $11 million.
Johnson adds that the going prices for strata units built in Kingston & St Andrew are in the low teens or mid-twenties, referring to prices in millions of dollars, while luxury apartments in other parishes are going for $15 million to $20 million.
However, he declined to comment on a median home price, saying that data is still to be collated.